ECON 219 Lecture Notes - Lecture 17: Price Discrimination, Market Failure, Externality

• School: McGill University
• Department: Economics
• Course: ECON 219
• Professor: Tom Velk

Document Summary

Welfare economics: market failures, standard story just lists market failures and says need government, doesn"t happen as often as people think. List of failures (know each failure & definition, exam q: public goods, free riders, externalities, tech, path dep, network ex, moral hazard, foreclosure, barriers to entry, speculative bubbles. Public good exam q w/ numbers: 3rd characteristic: make sure that if a good can be paid for, then the good should be brought into production. Sometimes we need to break the rule of one price per good: examples: the total wtp for a school is 40%, however you only need 25$ to pay for it. You have five different people, how much do you charge each person. If you have a public project that is worthwhile, there is a private pricing scheme that gives 100% support to it: benefits > costs always.