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In the Caribbean, the queen conch is a large marine mollusk found in shallow waters of sea grass. These waters are so shallow, and so clear, that a single diver may harvest many conch in a single day. Not only is conch meat a local delicacy and an important part of the local diet, but the large ornate shells are used in art and can be crafted into musical instruments. Because almost anyone with a small boat, snorkel, and mask, can participate in the conch harvest, it is essentially nonexcludable. At the same time, fishing for conch is rivalrous; once a diver catches one conch it cannot be caught by another diver.

Goods that are nonexcludable and rivalrous are called common resources . Because the waters of the Caribbean are open to all conch fishermen, and because any conch that you catch is conch that I cannot catch, common resources like the conch tend to be overharvested.

The problem of overharvesting common resources is not a new one, but ecologist Garret Hardin put the tag “Tragedy of the Commons” to the problem in a 1968 article in the magazine Science . Economists view this as a problem of property rights. Since nobody owns the ocean, or the conch that crawl on the sand beneath it, no one individual has an incentive to protect that resource and responsibly harvest it. To address the issue of overharvesting conch and other marine fisheries, economists typically advocate simple devices like fishing licenses, harvest limits, and shorter fishing seasons. When the population of a species drops to critically low numbers, governments have even banned the harvest until biologists determine that the population has returned to sustainable levels. In fact, such is the case with the conch, the harvesting of which has been effectively banned in the United States since 1986.

Visit this website for more on the queen conch industry.

Positive externalities in public health programs

One of the most remarkable changes in the standard of living in the last several centuries is that people are living longer. Thousands of years ago, human life expectancy is believed to have been in the range of 20 to 30 years. By 1900, average life expectancy in the United States was 47 years. By 2015, life expectancy is 79 years. Most of the gains in life expectancy in the history of the human race happened in the twentieth century.

The rise in life expectancy seems to stem from three primary factors. First, systems for providing clean water and disposing of human waste helped to prevent the transmission of many diseases. Second, changes in public behavior have advanced health. Early in the twentieth century, for example, people learned the importance of boiling bottles before using them for food storage and baby’s milk, washing their hands, and protecting food from flies. More recent behavioral changes include reducing the number of people who smoke tobacco and precautions to limit sexually transmitted diseases. Third, medicine has played a large role. Immunizations for diphtheria, cholera, pertussis, tuberculosis, tetanus, and yellow fever were developed between 1890 and 1930. Penicillin, discovered in 1941, led to a series of other antibiotic drugs for bringing infectious diseases under control. In recent decades, drugs that reduce the risks of high blood pressure have had a dramatic effect in extending lives.

These advances in public health have all been closely linked to positive externalities and public goods. Public health officials taught hygienic practices to mothers in the early 1900s and encouraged less smoking in the late 1900s. Many public sanitation systems and storm sewers were funded by government because they have the key traits of public goods. In the twentieth century, many medical discoveries came out of government or university-funded research. Patents and intellectual property rights provided an additional incentive for private inventors. The reason for requiring immunizations, phrased in economic terms, is that it prevents spillovers of illness to others—as well as helping the person immunized.

The benefits of voyager i live on

While we applaud the technology spillovers of NASA’s space projects, we should also acknowledge that those benefits are not shared equally. Economists like Tyler Cowen , a professor at George Mason University, are seeing more and more evidence of a widening gap between those who have access to rapidly improving technology, and those who do not. According to Cowen author of the recent book, Average Is Over: Powering America Beyond the Age of the Great Stagnation , this inequality in access to technology and information is going to deepen the inequality in skills, and ultimately, in wages and global standards of living.

Key concepts and summary

A public good has two key characteristics: it is nonexcludable and nonrivalrous. Nonexcludable means that it is costly or impossible for one user to exclude others from using the good. Nonrivalrous means that when one person uses the good, it does not prevent others from using it. Markets often have a difficult time producing public goods because free riders will attempt to use the public good without paying for it. The free rider problem can be overcome through measures to assure that users of the public good pay for it. Such measures include government actions, social pressures, and specific situations where markets have discovered a way to collect payments.

Problems

Becky and Sarah are sisters who share a room. Their room can easily get messy, and their parents are always telling them to clean it up. Here are the costs and benefits to both Becky and Sarah, of taking the time to clean their room: If both Becky and Sarah clean, they each spends two hours and get a clean room. If Becky decides not to clean and Sarah does all the cleaning, then Sarah spends 10 hours cleaning (Becky spends 0) but Sarah is exhausted. The same would occur for Becky if Sarah decided not to clean—Becky spends 10 hours and becomes exhausted. If both girls decide not to clean, they both have a dirty room.

  1. What is the best outcome for Becky and Sarah? What is the worst outcome? (It would help you to construct a prisoner’s dilemma table.)
  2. Unfortunately, we know that the optimal outcome will most likely not happen, and that the worst one will probably be chosen instead. Explain what it is about Becky’s and Sarah’s reasoning that will lead them both to choose the worst outcome.
Got questions? Get instant answers now!

References

Cowen, Tyler. Average Is Over: Powering America Beyond the Age of the Great Stagnation . Dutton Adult, 2013.

Hardin, Garret. “The Tragedy of the Commons.” Science 162 (3859): 1243–48 (1968).

Questions & Answers

Price and output determination in a monopoly?
Ruchi Reply
Monopoly :its features, measures market power
Ruchi
Monopoly is market structure where he/she is d boss with no competition.Therefore he quote his own price for product as well for quantity he provide. Eg.Suppose desert area only one shop he/she selling 10ltr water bottle @25.But with same amt you could have bought 20ltr if it's perfect competition.
Tactful
Economics is a social sciences that have diverse application
Francis Reply
what is economics?
Osborne Reply
Economic is the study of human behaviour in relation with the scare resources and it alternate use.
Tactful
Economics is a social sciences that have diverse application...
Francis
the branch of knowledge concerned with the production, consumption, and transfer of wealth.
charlon
choice and opportunity cost?
SRIPRIYA Reply
choice is the next best alternative
Taina
Choice is option available. Opportunity cost means giving up other to get The 1st one. eg. U r hungry u got 2option available on fridge A and B. You select A over B. so this is opportunity cost. B is the Opportunity Cost over A.
Tactful
can I get simple language and examples?
Gajendra Reply
what is demand
Yavara Reply
what is fiscal policy
David
fiscal policy can be defined as the use of government's income and expenditure for a specific purpose
Nzenwata
ahhhh.. i dont what is expindetures
ian
It is the policy use by govt to influence economy ( manage inflation and deflation). Steps involved are govt spending and taxation.
Tactful
Demand is quantity of good a person is willing and ready to buy at given period of time at given price.
Tactful
good
abubakar
good but high language
Gajendra
lower the language @gajendra Singh
abubakar
What is natural monopoly
Ruchi
Natural monopoly is a market structure or system where the creation of goods and services, it's distribution and pricing mechanisms are undertaken by a sole firm resulting from demand, economies of scale and existing market survey other than legal constraints.
Gh
I don't really know anything about economics but am offering it at the University....
Oteng
Which uni if I may ask...?
Gh
can u help me guys to answer this question what are the different ways of defining money in your economy? Compare these with the monetary aggregates commonly used in another selected country. Explain their differences and the reasons for such differentiation.
aisyah
Why do we observe a wide variety of checking and savings accounts, rather than just one of each type? What are the reasons for the existence of financial intermediaries? Why do the ultimate lenders usually not lend directly to the ultimate borrowers?
aisyah
what is economic
David
The social science which study human behaviour and relationship between end and scare mean which have alternative uses.
Amadu
Explain economic growth with the use of ppf?
Michael Reply
what z the meaning of ppf
rivan
do u mean ppc
Nzenwata
Yes pls ppc
Michael
an expansionary fiscal policy could be achieved by what
David
if the price of cigarettes ,food and alcohol rised by 10% in a year ,which is most likely to affect the cpi the most.
David
what measures would be suitable for reducing a recessionary gap.
David
increasing the level of government government expenditure is an instrument of what
David
A reductionin income tax rates would blank the blank of the multiplier
David
progressive taxes may slow down economic recovery .This is as a result of what
David
money acts as a safe guard against inflation something and something one of a function of money
David
A rise in expenditure for consumer goods something and something ,one of the cause of cost- push inflation
David
PPC IS production possibility curve. It show possible good which can be produced by an economy with given resource and technology.
Tactful
Recessionary gap can be solved by Monetary and Fiscal policy
Tactful
What are the positive effects on the economy to legalize drugs?
Richard Reply
wat factor give raise to monopoly
Ebenezer Reply
a product which is unique /it has very less substitutes in the market. so this product has no much competition .... for example , railways
mikey
its a monopoly
mikey
does monology has factors or it has merits n demerits
rivan
monopoly or oligopoly is just a type of market in which demand and supply is measured to meet public interests
mikey
economy is all about psychological behaviour of humans to each other and to environment economists role is to keep everything in equilibrium
mikey
factors give rise to monopoly. 1. Patent right 2. Cartel 3. Govt policy. 4. Control over raw material. 5. money for investment
Tactful
oligopoly and monopoly are examples of imperfect market..
Nzenwata
First, second and third degree price determination under monopoly
Ruchi
please explain what is elasticity of supply
Austine Reply
is the responsiveness of quantity supplied of commodity to changes in its own price
rivan
what is the cause of a country's population
Destiny Reply
please it seems your question is not clear ,is it the cause of increase or decrease population in a country or what
okai
what is producer surplus
Destiny Reply
is the excess earns btn wat a producer was willing to charge for e commodity and wat actually receives after selling it
rivan
OK good
Destiny
yeap
Bright
what is supply curve
Destiny Reply
are curve that do not obey the law of supply eg aren't +ve
rivan
half of 1%
Destiny
as in what do u mean by that
rivan
it simply shows the quantity of goods that a film is willing to supply at each price of a commodity
Destiny
OK what is the law of supply as u said
Destiny
It is the indifference curve that indicates the aggregate responsiveness of supply to the price of a commodity, and sometimes its demand of that same commodity.
Gh
nice
Destiny
pls explain how indifference curve connects to the aggregate responsiveness of supply to the price of a commodity
JOSHUA
law of supply according to me states that wen thea z higher price of commodity, the higher will be the supply and lower the supply will be for a commodity other factors remain constant
rivan
Joshua be clear to your QN plizzz
rivan
pls read Gh's comment and break down for me
JOSHUA
may be he can explain more because am am also not getting what he was meaning in that statement
rivan
plizzz GH explain to us
rivan
When demand and supply intersection
Pronoy
then it z called what
rivan
can I learning what is meaning off economics
Jimcaale
can you tall me what is meaning
Jimcaale
good
abubakar
please oligopoly explan.......
Zahid
in oligopoly there is a competition between companies, becoz all those companies produce almost similar products in monopoly , product has no substitutes in the market for competition, so people have no choice to choose another similar product over this, becoz there is no similar product
mikey
oligopoly : mobile phone manufacturing companies have huge competition over one another
mikey
what is consumers surplus
Destiny Reply
is a difference btn consumers planned expenditure and actual experience on the commodity
rivan
OK good
Destiny
What exactly are factors that affects Demand and Supply?
Chandrapaul Reply
demand factors price o commodity size o population level o advertising season 4 commodity testes and preferences price o other related commodity level o consumers income government policy on taxation
rivan
supply factors general price level natural factor level o taxation technology political climate cost o production number o producers aggregate demand working conditions
rivan
yea___ Demographical psychographical geographical factors also account for determination of demand and supply
Gh
the study of economics helps in decision making in the framework of uncertainty and scarcity of resources. discuss the statement and elaborate with examples
Seth

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Source:  OpenStax, Principles of economics. OpenStax CNX. Sep 19, 2014 Download for free at http://legacy.cnx.org/content/col11613/1.11
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