Week 14 · Readings & resources

Week 14 — Readings & Resources

Principles of Microeconomics Free sample edition

Your primary reading is Chapter 14 (in this module). Everything below is the optional, go-deeper layer — pick what helps, skip the rest.

How to use this page

This page has 10 items (4 readings and 6 videos). Allow 55–64 minutes for everything. Each group points back to the matching chapter section and class-session segment, so use the full menu when you want more, or take the quick path below.

Every video here has captions: turn them on with the CC button in the player. The chapter covers the same ideas in text.

Pick-one quick path (20–20 min total)

① Spillovers, the efficient quantity, and the corrective tax

Chapter 14, Section “Bring back Week 7's tax as a corrective tax” · Session 1, Segment 2, “The efficient quantity and the corrective tax” · Remember: when sellers ignore a cost that lands on bystanders, the market makes too much, and a tax equal to the harm per unit moves it back to the efficient quantity.

Externalities: Economic Lowdown — Federal Reserve Bank of St. Louis — opens by asking what pollution, education, and a neighbor's dog have in common, then follows a widget factory whose smoke shifts part of its cost onto the town, so widgets sell too cheaply and too many get made. Its example tax of 20 cents a widget, equal to the harm on each one, is the chapter's corrective tax with smaller numbers. The second half treats education as a positive externality fixed by a subsidy. Use it while completing the Week-14 module overview. (video, 6 min) (captions: creator)
Negative Externality: Consumer Surplus, Producer Surplus, and Deadweight Loss — Economics in Many Lessons — a worked problem with a constant 2-dollar external cost, the same size as the chapter's, on a different market: it finds the market outcome, adds the harm to get marginal social cost, finds the efficient outcome, and then computes consumer surplus, producer surplus, the cost of the externality, and the deadweight-loss triangle for each. It reads supply as marginal cost, which builds on Week 10's work with perfect competition, where a price-taking seller produces where price equals marginal cost. (video, 10 min) (captions: automatic)

② Caps, permits, and bargains

Chapter 14, Section “Cap the total: cap-and-trade” · Session 1, Segment 3, “Cap-and-trade and the Coase theorem” · Remember: a cap fixes the total amount of pollution and trading moves the cutting to whoever can cut most cheaply, while cheap bargaining can fix a spillover whoever holds the right.

Acid Rain Program — U.S. Environmental Protection Agency — the agency's own description of the program this week uses as its real cap-and-trade case. Read from the top down to the line saying each allowance covers one ton of sulfur dioxide, and look for the permanent cap and the options to sell, buy, or bank allowances. The agency's statements about how well the program has worked are its own assessment. Stop before the long list of legal rulings near the bottom. (reading, 5–7 min)
Economics: Tradable and Non-Tradable Pollution Permits or Pollution Allowances — Economics in Many Lessons — two firms must cut pollution to a fixed total. With permits they cannot trade, the cuts cost more in all; once the firm that can cut cheaply sells its permits to the firm for which cutting is costly, the same total costs less and both firms come out ahead. It is the two-plant story from the chapter worked out with numbers. (video, 6 min) (captions: automatic)
The Coase Theorem Explained: Coasean Bargaining Definition, Conditions/Assumptions and Examples — One Minute Economics — a popular restaurant's noise bothers its neighbors, and instead of a costly lawsuit the two sides could bargain, with either one paying the other. The video then lists the conditions the result needs, such as low bargaining costs and full information, and warns that they often fail in practice. Its closing remarks about which economic system suits bargaining are the narrator's opinion, not a result. (video, 2 min) (captions: automatic)

③ Public goods, free riders, and the commons

Chapter 14, Section “Manage a commons” · Session 2, Segment 4, “Public goods, free riders, and common resources” · Remember: ask whether a good is rival and whether it is excludable; goods no one can be kept from invite free riders, and shared resources can be overused unless users agree on rules.

The 4 Types of Goods: Economic Concepts Explained — Think Econ — sorts goods by the two questions the chapter uses, excludable and rival, into private goods, public goods, common resources, and club goods, with examples of each and a summary table at the end. Treat its road example with care: a crowded road leaves less room for the next driver, so it is rival. Its remark that public goods are typically supplied by the government describes who often pays, not what makes a good public; the chapter's test is rival and excludable, whoever provides it. (video, 4 min) (captions: creator)
The Tragedy of the Commons Explained in One Minute — One Minute Economics — a shared pasture is overloaded because each herder gains from one more animal while the damage is spread across everyone, and a collapsed cod fishery shows the same pattern at sea. It mentions private ownership as the way out; the third answer, community rules, is in the reading below. (video, 2 min) (captions: automatic)
Catch Shares — NOAA Fisheries — the federal fisheries agency's explanation of a tool that gives individual fishers, cooperatives, or fishing communities a share of the allowed catch. Read the sections on how catch shares work and why they are used, and notice the phrase about ending the race to fish, which is the commons problem in the agency's words. Skip the list of design principles. (reading, 4–6 min)
Economic governance: the organization of cooperation — nobelprize.org — the plain-language account of the work that earned Elinor Ostrom the economics prize. Read the sections on governing the commons, failed collectivization and privatization, failed modernization, and active participation, which describe grasslands, irrigation systems, and users who make and enforce their own rules. Notice that it also says privatization or regulation sometimes works better. Skip the later sections on firms. (reading, 8–10 min)

Optional one-stop reference (free online reference)

Public Goods — Concise Encyclopedia of Economics, Econlib — a signed reference entry. Read the opening paragraphs, which use a fireworks show worth ten dollars to each viewer to explain nonexcludability and the free-rider problem, and the passage on roommates who share chores. The closing paragraphs argue that private solutions usually beat government ones; that is a normative position, so read it as one side of a debate. (reading, 8–11 min)

Heads-up (links rot): these point to outside sites that occasionally move or rename pages. If a link ever fails, tell your instructor and use the reference above in the meantime.

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