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Terms in this set (11)
Caused by lack of securely defined private property rights.
Give owners the exclusive right to control and benefit from their resources as long as their actions do not harm others. Provide legal protection against the actions of parties who might damage, abuse, or steal property.
Harmful effects of individuals or a groups on the welfare of a no consenting secondary party, not accounted for in market prices.
Enforceable property rights and info
Owners must be able to show the rights have been violated to legally enforce property right.
Common property rights
Resources for which rights are held in common for a group of individuals, none of whom had a transferable ownership interest.
Open access resource
Generated external costs and the resource will be over utilized
External costs and benefits
Group or individual action that spills over and has detrimental or beneficial effect on the well being of third parties
Sum of private and external costs
Private and social costs will be equal if there are no
When external costs are present
Market prices understate the social cost of resource use, and a net loss to the community
When external benefits are present
The market demand curve understate the social gains of conducting the activity
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