Unit 6: Market Failure and Public Policy
1. Discuss today's reading: marginal social cost (MSC) and marginal social benefit (MSB) of pollution, optimal quantity of pollution, positive and negative externalities; transaction costs, and Coase Theorem. Assignments: Read pp. 462-471; Answer and Look #1, p. 471; Activity 5-3 (Coase Theorem) and 5-4 (Economic Efficiencies), both due Thursday. [4/21]
2. Discuss today's reading: technology spillover, Pigouvian tax and Pigouvian subsidy, private and social benefits, and industrial policy. Assignments: Read pp. 475-489; Answer and Look #1 and 2 on p.479, #1 on p. 484, and #2 on p. 487; Assignments: Activity 5-2 (Externalities) and Handout 4-11-1 (Why Markets Fail), both due on Friday; Extra credit, Handout 4-11-2 (First Law of Garbage) and 4-11-3 (Is There a Better Way to Clean Up the Environment?), both due by end of unit. [4/22]
3. Discuss today's reading: characteristics of goods, four types of goods, artificially scarce goods, and cost-benefit analysis. Assignments: Read pp. 493-507; Activity 5-1 (Public Goods and Services) and Activity 53 (Public or Private), both due Monday. Extra credit: Activity 58 (Public Choice Economics). [4/25]
4. Discuss today's reading: tax efficiency, equity or fairness, administrative costs, benefits principle, lump-sum tax, types of taxes, average and marginal tax rates, and transfer payments. Assignments: Read pp. 507-516, Activity 5-5 (What Is a Fair Tax?) and Activity 5-6 (Who Pays the Income Tax?), both due Tuesday. [4/26]
5. Discuss today's reading: poverty line, poverty rate, welfare, negative income tax, rational ignorance, redistribution of income. Assignments: Read pp. 406-13; read article, "Stop Coddling the Super-Rich" by Warren Buffett and complete a Clarifying and Summarizing worksheet, due Wednesday; extra credit, Handout 4-7-1 (National Commission on Taxation). Distributed Unit 6 Review Sheet. [4/27]
End of Unit 6. Material will be tested with a combined test with Unit 7 on May 8.
2. Discuss today's reading: technology spillover, Pigouvian tax and Pigouvian subsidy, private and social benefits, and industrial policy. Assignments: Read pp. 475-489; Answer and Look #1 and 2 on p.479, #1 on p. 484, and #2 on p. 487; Assignments: Activity 5-2 (Externalities) and Handout 4-11-1 (Why Markets Fail), both due on Friday; Extra credit, Handout 4-11-2 (First Law of Garbage) and 4-11-3 (Is There a Better Way to Clean Up the Environment?), both due by end of unit. [4/22]
3. Discuss today's reading: characteristics of goods, four types of goods, artificially scarce goods, and cost-benefit analysis. Assignments: Read pp. 493-507; Activity 5-1 (Public Goods and Services) and Activity 53 (Public or Private), both due Monday. Extra credit: Activity 58 (Public Choice Economics). [4/25]
4. Discuss today's reading: tax efficiency, equity or fairness, administrative costs, benefits principle, lump-sum tax, types of taxes, average and marginal tax rates, and transfer payments. Assignments: Read pp. 507-516, Activity 5-5 (What Is a Fair Tax?) and Activity 5-6 (Who Pays the Income Tax?), both due Tuesday. [4/26]
5. Discuss today's reading: poverty line, poverty rate, welfare, negative income tax, rational ignorance, redistribution of income. Assignments: Read pp. 406-13; read article, "Stop Coddling the Super-Rich" by Warren Buffett and complete a Clarifying and Summarizing worksheet, due Wednesday; extra credit, Handout 4-7-1 (National Commission on Taxation). Distributed Unit 6 Review Sheet. [4/27]
End of Unit 6. Material will be tested with a combined test with Unit 7 on May 8.