GEOG 1972 Lecture Notes - Lecture 4: Clean Air Act (United States), Cornucopian, Monopsony
Document Summary
Supposed to reflect how scarcity would be taken care of. Very narrow view only looked at 5 commodities. Where supply meets demand it creates and equilibrium (theoretical) Will constantly be in flux depending on what is happening around the world. Resource scarcity leads to market response which leads to resource availability. If supply goes down price and quantity demanded will be affected. People are rational but it is because of social pressures. Smith"s invisible hand: pursuit of self-interest leads to social goods. Will resolve problems of scarcity due to certain price points. Leads to efficiency- if people act out of their own self-interests. Analyze whether the price of things makes things worth it or if you could find something cheaper. Most be something you can actually own, material things. Externalities: when cost of transaction affects someone other than the buyer. Negative externality: negative and uncompensated loss of welfare to someone outside the transaction exists.
