Week 3: ECON 330 Free Market vs. Environmental Quality and Natural Resource Management

Week 3: ECON 330 Free Market vs. Environmental Quality and Natural Resource Management

Week 3: ECON 330 Free Market vs. Environmental Quality and Natural Resource Management

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Read the following article:
Externalities: Prices Do Not Capture All Costs
Markets will generally provide efficient solutions so long as there aren’t significant market failures. Market failure is defined at the end of Keohane and Olmstead, Chapter 4 (and in greater detail in Chapter 5 which is the assigned reading for next week). Answer all of the following questions in your initial response to the topic:
What is a market failure?
What would be an example of a market failure that would prevent an efficient outcome with respect to environmental quality?

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What kind of government policies do economists recommend to correct market failure?
Reflection: Include a paragraph in the initial response in your own words using microeconomics terminology, reflecting specifically on what you learned from the assignment and how you think you could apply what you learned in the workplace or in everyday life.

Your answers should be written in your own words. Don’t use quotes from the articles.

You are expected to make your own contribution in a main topic as well as respond with value-added comments to at least two of your classmates as well as to your instructor.

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