...CH5. Natural Resource Utilization & Pollution of the Environment * Resource depletion: the consumption of finite or scarce resources. * Pollution: undesirable contamination of the environment by the manufacture or use of commodities. * Conservation: the saving or rationing of resources for future use. * Private costs: costs of production borne by the producer. * External costs: costs of production not borne by the producer. * Social cost of production: = private costs + external costs * Internalization: make producers bear the total social cost of production. * Ecological system: an interrelated and interdependent set of organisms and environments * Ecological ethics: ecosystems as having inherent rights or interests and we have direct duties to them. * Ecofeminism: socio-ethical theory which combines ecological ethics with a critique of paternalistic patterns of domination (top down hierarchical authority structures) in our political and economic institutions as contributing to environmental exploitation. * Unlimited resource view: view encapsulating the attitude of bygone times which regarded the earth’s carrying capacity as unlimited, and air and water as "free goods." * Sustainable growth: a level of economic and population growth which enables each generation to hand down a world no worse than it inherited to succeeding generations, which avoids the Doomsday scenario. * Doomsday scenario:...
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... American Tongues Ess... the story about a ma... The Constitution Child labor in Nepal View all new essays » This user no longer exists on CheatHouse.com. Sometimes users ask to have their accounts deleted. When this happens we remove information that refers specifically to the user, but we keep their old comments and essays. The user you clicked on has been deleted and can no longer be contacted. *Essay Title :* The Causes of Market Failure Date: June 28, 2004 Level: University, Bachelor's Grade: C+ Length: 6 pages (1597 words) Essay rating: {draw:frame} {draw:frame} {draw:frame} {draw:frame} {draw:frame} Keywords: consumption externalities, social efficiency, desirable outcomes, market failure, fashion markets, factors of production, ...)disequilibrium, immobility, inequity, inefficiency, economic activity, infallible, producers, existence Hide extra keywords) Subject > Business > Markets & Exchanges {draw:frame} Why do markets fail to generate socially desirable outcomes? Markets are not infallible. They can fail to organise economic activity in a socially desirable fashion. Markets failure are due to social inefficiency and inequity. In the real world, the market rarely leads to social efficiency: the marginal social benefits of...
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...an organisation. ‘Free Market’ perspective Accounting information should be treated like other goods, with demand and supply forces allowed to operate to generate an optimal supply. Arguments supporting ‘free – market’ perspective Private economic – based incentives ‘Market for managers’ ‘Market for corporate takeovers’ ‘Market for lemons’ Private economic – based incentives Assumed that managers will operate business for own benefit and this is expected by shareholders and debt holders Therefore in interests of management to enter contracts with shareholders and debt holders to constrain managers’ actions Contracts often based on accounting information Organisations not producing information will be penalised by higher costs of capital....
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...January 2012 – Context 2 Question 1. An external cost can be defined as a cost faced by a third party for which no compensation is forthcoming when producing or consuming a good. If there are any external costs in consuming the good, the social cost will be greater than the private cost. The occurrence of an external cost may lead to market failure. This is because the free market forces generally ignore the external cost. For example, driving a car imposes a private cost to the driver but driving a car also creates a greater social cost for other people (the third party) in society such as; Noise and Air Pollution. Question 2. From Extract D, I have observed that the cost of operating a speed camera per site is approximately about £21093. This is higher than the cost of operating per traffic light camera, for which the cost is about £14693. I have also observed that the annual fine income generated by speed cameras is higher at £6,730,000 than that of the annual fine income generated by traffic light cameras, which is at £1,632,000. Question 3. A merit good is a good or service which generally consist of positive externalities that benefit the greater society in general. These good/services are provided by the state as the market forces fail to provide them at an optimal output. Merit goods are often underprovided because the consumers of these merit goods do not consider the greater social benefit and mostly the private benefit of consuming the...
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...EESA10 H3-S L30 "HUMAN HEALTH AND THE ENVIRONMENT" Assignment #2 Issued: Monday, March 9th Dept. of Environmental Sciences, University of Toronto Scarborough, Toronto, Canada Due: Monday March 23th at 5pm, box outside SW-511A TA: Steven Huryn [pic] Question 1: Reference dose or RfD, is the maximum amount of acceptable oral dose of a toxic substance set by the EPA (United States Environmental Agency).( Agency for Toxic Substances and Disease Registry, 2009) The EPA uses RfD as a benchmark to set other regulations to prevent people from being exposed to amount exceeding the RfD standard. The EPA also has a unique RfD for every substance it evaluates. However, often separate acute and chronic RfDs are determined for the same substance. (US Environmental Protection Agency, 2014) Cancer slope Factor, or CSF, is used to approximate the potential risk of cancer associated with exposure to a carcinogenic or potentially carcinogenic substance. (US Environmental Protection Agency, 2014) This approximation is usually expressed in units of a population affected per mg of substance/ kg body-weight/ day. A toxicity value that defines quantitatively the relationship between dose and response, or the slope factor, is calculated when the chemical is a known or probable human carcinogen. And different than RfD, High-quality Human data, or an epidemiological studies, on carcinogens is preferable to animal data. However, when human data is limited, the attention is given to...
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...whereby resources are not efficiently allocated (Financial Times Lexicon, 2014). We’ll explore this notion further in the latter part of this essay. Underlying philosophies. The proponents of free trade and free markets, such as Adam Smith, do indeed possess and proliferate legitimate arguments concerning government intervention in the market. To be intellectually honest from a position of advocating government intervention, this admission will be made: it should not be the role of government to intervene in the market as a standard practice, and the market ought to be free to flourish and create wealth. Nobel Prize-winner Ronald Coase (1960) attempted to demonstrate that as long as property rights are clearly defined and transaction costs are low, negotiation between affected parties may be sufficient in resolving apparent negative...
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...declined. The state now owns less of the country’s housing stock. b That the state thinks there is less market failure in the housing market now than in 1979. use. Figure 1 shows that drivers do not initially pay for the negative externalities (external costs) they generate. A tax equivalent to the marginal external cost would push price up to PX. Road use would be reduced from Q to QX, the socially optimum level. In practice, it is difficult to estimate external costs. d Congestion and other negative externalities caused by car use will increase. Road use by cars is likely to continue to increase in the absence of government action because: the price of road use does not reflect its true costs; road use is income inelastic – as incomes rise, people use their cars more and more families have cars; increasing economic activity and geographical mobility mean there are likely to be more cars on the road. Activity 2, page 163 a The action suggests that pre-2003 car use was above the socially optimum level. This is because the Mayor’s action was designed to reduce car use. b Two other policies which could be used are to increase the cost of parking and to increase cycle and bus lanes in central London. Figure 1 MSB MSC MPC costs/benefits Activity 3, page 164 a The government does not provide IVF treatment in every region because of lack of resources. b NHS IVF treatment is a substitute to private IVF treatment, but in terms of maternity care it is a complement. PX P MSC MSB...
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...Turra Brouwer 11-1175 9/08/201 An Externality is when costs or benefits of certain activities spill or fall into third parties that have nothing to do with the initial situation in hand; its like a side effect or consequence of an activity that affects other parties who did not choose to incur that cost or benefit. Like you can see there can be either costs, or benefits that affect those third parties. When it is a cost that is imposed on third parties, it is called a negative externality; negative externalities occur when a decision or activity imposes costs on anyone that is not involved in the making of the decision, that is if a decision imposes any kind of external cost, which are costs you impose on others, then the social cost will exceed the private cost, which is the cost to the decision maker. On the other hand, when the third party benefits from an activity in which they are not directly involved, the benefit is called positive externality. Negative externalities occur in our every day life; you see, since humans are a very self centered specie we tend to think about the cost something would have on us and very rarely on what it would have on others. Even consumers do not take cost of externalities into account when buying a product that may have a negative externality. So, when a negative externality occurs in an unregulated market, producers don’t take responsibility for external costs, these costs are just passed on to society and to the government’s hands...
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...Using the information in the data and your own economic knowledge, evaluate the economic case for and against governments attempting to influence how mobile phones are manufactured and used. (25) The government should intervene in the mobile phone market to correct market failure due to the presence of negative externalities. Negative externalities are detrimental third-party effects caused by the production and/or consumption of a good. A public good is a good provided free of charge to the consumer, by the government. A public good is non-excludable and non-rivalrous. A merit good is a good that gives positive externalities upon production and/or consumption. A merit good is non-excludable, yet rivalrous. The negative externalities of mobile phone production stem from the production and consumption of the service broadcasting masts provide. The demand for broadcasting masts is derived from the demand for mobile phones. Broadcasting masts are said to cause negative externalities in the form of health-issues, such as cancer (Extract F, line 7). Negative health effects are a drain on government resources as healthcare is provided as a public good by the government, in the form of the NHS. An increase in cases of ill-health will cause an increase in the demand for the NHS, costing the government and tax payers money which is finite and must be put to its best use. As the demand for mobile phones is highly inelastic (Extract E, Line 9), the demand for broadcasting masts is...
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...declined. The state now owns less of the country’s housing stock. b That the state thinks there is less market failure in the housing market now than in 1979. use. Figure 1 shows that drivers do not initially pay for the negative externalities (external costs) they generate. A tax equivalent to the marginal external cost would push price up to PX. Road use would be reduced from Q to QX, the socially optimum level. In practice, it is difficult to estimate external costs. d Congestion and other negative externalities caused by car use will increase. Road use by cars is likely to continue to increase in the absence of government action because: the price of road use does not reflect its true costs; road use is income inelastic – as incomes rise, people use their cars more and more families have cars; increasing economic activity and geographical mobility mean there are likely to be more cars on the road. Activity 2, page 163 a The action suggests that pre-2003 car use was above the socially optimum level. This is because the Mayor’s action was designed to reduce car use. b Two other policies which could be used are to increase the cost of parking and to increase cycle and bus lanes in central London. Figure 1 MSB MSC MPC costs/benefits Activity 3, page 164 a The government does not provide IVF treatment in every region because of lack of resources. b NHS IVF treatment is a substitute to private IVF treatment, but in terms of maternity care it is a complement. PX P MSC MSB...
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...reduction, those that gain from a reduction and finally at what level the overall price for petrol was BEFORE the tax reduction. In my conclusion I will show that this is key to deciding whether the tax should be lowered or not. The major argument for maintaining the level of taxation on petrol and diesel is to protect the environment. When the social costs of consuming a good are higher than the private costs, there is said to be a negative externality. As an individual consuming fuel is polluting the environment for all, then it can be seen that fuel produces a negative externality. This is illustrated in diagram 1 below. This shows that without any government intervention, the market equilibrium would consume Qp at price Pp. This is higher than the social equilibrium, Qs, meaning there has been a welfare loss to society of (shade triangle). Government fix this by imposing an indirect tax on producers, which effectively raises their costs of production, shifting their supply curve inwards. If they have set the tax at the right level, this internalises the externality and the new private cost curve looks exactly like the social cost curve, and the market “chooses” to consume Qs after the tax. This is shown as level Q2 on the diagram below. Importantly, as a result of the tax, the welfare loss triangle has disappeared. This...
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...Market Failure It occurs when the forces of market fails to allocate resources efficiently. Some causes of market failure include imperfect competition, external costs, etc. Our focus will be on external cost and how Bangladesh’s textile industry has contributed to market failure. Overview of Bangladesh’s Textile Industry Textile industry is the second largest industry in the world next to agriculture. Bangladesh has emerged, in just under a decade, as the twelfth largest textile manufacturing nation in the world. This industry has been one of the most success stories of Bangladesh over the last two decades. Textile industries are one of the largest and vital industrial sectors of Bangladesh with regard to earning foreign exchange and labor employment, providing 4.5 million jobs of which 80% are women and contributes 13% to GDP. A huge 78 percent of the country’s export earnings come from textiles and apparel, according to the latest figures available. Bangladesh exports its apparel products worth nearly $5 billion per year to the United States, European Union, Canada and other countries of the world. It is the sixth largest apparel supplier to the United States and EU countries. Combined, the textile and apparel sectors consist of 3,600 firms. There is a concentration of manufacturing activity in and around the capital city of Dhaka and a growing garment manufacturing presence in the country’s export processing zones. Environmental hazard arising from textile industry ...
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...“Business Ethics & Social Responsibilities” Part 1 – Introduction to Social Responsibilities and Business Ethics Focus point: • What is the meaning of “Business Ethics” & “Social Responsibilities”? • What kind of responsibilities do businesses have, towards their stakeholder? • Why are these important? Definitions: a) Social responsibilities … are duties that a business owes to those affected by its activities. b) Business ethics … is the influence of values and beliefs upon the conduct and operation of businesses, i.e. about morality and doing ‘what is right’ and not ‘what is wrong’. … “Why is it important that businesses should conduct ethical behavior?”… Businesses are often said to be run for the benefit of their owners, i.e. their “shareholders”. However, other “stakeholders” are also an important part of business decision making because it is argued that businesses have “Social Responsibilities” towards them. As such, businesses should act in a responsible and ethical manner and consider the possible effects of any decisions they make. “So…what kind of social responsibilities do businesses have, towards these stakeholders?” As we should know, businesses do not operate in isolation, they are actually a “part of society” who has an impact upon the lives of those communities in which they operate. And therefore… *** A firm which is ethical with regard to the society as a whole and the community...
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...Discuss whether indirect taxes on petrol should be reduced Petrol is seen as a de-merit good as it can cause market failure as the free market may fail to take into account the negative externalities of consumption (pollution) because the social cost exceeds the private cost. Consumers too may experience imperfect information about the long term costs to themselves of consuming products deemed to be de-merit goods By imposing indirect tax on producers it raises their costs of production, shifting their supply curve inwards. If they have set the tax at the right level, this internalises the externality. By doing this the price of fuel will go up and so reduce the amount consumed and therefore reducing the negative externality which is pollution. It also provides incentives to reduce the negative externality such as pollution. E.g. cars have become more fuel efficient It can also raise revenue for the government. One project could be investing in improving public transport , as this is a substitute for driving, and if it was improved it might give drivers an alternative to driving which would reduce the externality occurring in the first place. If the revenue was spent this way then all users of public transport would benefit, so those who currently use the bus and train would gain from the tax remaining high if that meant that their fares were cheaper (or service quality was better. They can also use the revenue to get rid of information failure regarding the overconsumption...
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...Why do markets fail? There are a number of reasons as to why markets fail and there are five different types of markets that this can be brought down to. These include: Monopoly, Collusion, Asymmetric information, Externalities and Public good and the free rider problem. Monopoly A monopoly can be seen as a form of market failure and this is because unlike in perfect competition, firms with large market power have the ability to inflate their prices as they are usually the ‘price-makers’. The price at which something will be sold is usually determined by the interaction of the supply and demand within the market. A monopoly can either set the selling price or quantities – but not both. The reason for this is because although they have a substantial amount of market power, they don’t have unlimited market power. Not only does the price depend on the actual market power of a firm, but it also depends on the actual demand of the good / service. The reason for this is because if the demand for a good / service was already low, but the firm decided to increase the price, then the demand would become even lower as customers may not be willing to pay that much. An explained graph of a monopoly can be found in the ‘imperfect competition’ section of the essay (Page 4). Perfect / Imperfect Competition Perfect competition Perfect Competition (Occasionally named Pure Competition) is when no competitor in the market has enough market power in order to attempt to rig the price of a...
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