A voltage V is applied to the capacitor network shownin Fig. 24-29. (a) What is the equivalent capacitance?[Hint: Assume a potential difference Vab exists across thenetwork as shown; write potential differences for variouspathways through the network from a to b in termsof the charges on thecapacitors and the capacitances.](b) Determinethe equivalent capacitanceif C2 = C4 = 8.0 ixF andCi C3 = C5 4.5 /xF.FIGURE 24-29 40.
Topic 7: Externalities and Public Goods Externalities Internal costs o The costs of an activity paid by an individual in the activity External costs o The cost of an activity paid for by someone else not directly involved in the activity Social costs o Sum of internal and external costs Third Party Problem Externalities o Occur when private cost (or benefit) diverges from social cost (or benefit) Third Party Problems o People not directly involved in activity experience positive or negative externalities Negative externalities o Costs experienced by third parties o “too much” of the good is consumed and produced Positive externalities o Benefits experience by third parties o “not enough” of the good is consumed and produced Correcting for externalities Internalizing the externality o The individual involved in the activity takes account for social costs (or benefits) For negative externalities o Force individuals to pay for external costs o Tax production o Regulate production Overall output is reduced, illustrated by a leftward shift in supply Correcting for externalities For positive externalities: o Help individuals realize external benefits o Finance and/or subsidize production and consumption of the good o Laws requiring consumption Vaccines Education o Overall consumption is increased, illustrated by a rightward shift in demand Positive Externalities When an externality benefits the bystanders, a positive externality exists The social value of the good is greater than the private value Coase Theorem Coase Theorem states that: if there are no barriers to negotiations, and if property rights are fully specified, interested parties will bargain to correct any externalities Known as internalizing the externality Private Goods Characteristics of certain consumption goods Excludable o The good must be purchased before use Rival o The good cannot be enjoyed by more than one person at the same time Private goods o Are both excludable & rival in consumption o Most goods we purchase & consume are private goods Public Goods Public Goods o Can be consumed by many o Difficult to exclude nonpayers from consumption FreeRider problem o Someone has the ability to receive the benefit of a good without paying for it The Swear Jar A Public Good has two characteristics: o Nonrival in consumption o Nonexcludable Event creates a serious freerider problem Club Goods, Common Resources Club goods o Nonrival and excludable (anything with a password is a club good, if not, public good) Common Resource goods o Rival but nonexcludable Common Resources Tragedy of the commons: occurs when a rival (but nonexcludable) goods becomes depleted or ruined. Similar to a negative externality Importance of Property Rights If not well defined, tend to be exploited, overused Government can potentially solve the problem General proactive management is needed: o Taxes, regulations, or other ways to internalize a negative externality