Are the externalities associated with common resources positive or negative?
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11-18-2012, 01:04 PM
Post: #1
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Are the externalities associated with common resources positive or negative?
Is the free market use of common resources generally greater or less than the efficient use?
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11-18-2012, 01:13 PM
Post: #2
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*Common resources are bast described as public goods. For example sea resources, over use will have negative effect on environment. Forest resources, regular planting will have positive effect on environment.
* Free market may use the resources more efficiently but social cost mostly outweigh the gain of social benefit. For more : read the chapter on public goods from the book on microeconomics and read any book on cost benefit analysis. Ads |
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