Read the following selections from the Margin Notes by clicking
on each link.
Watch these presentations. When you click on one of the links below,
a new screen will pop up. Use the scrollbar on the side of the new screen to
You need Adobe Reader to view PDF files.
(Optional) Read the following chapters from the textbook.
Chapters 12 - 14
D. The following Optional
Links will help you do better in your course but they are not required.
Activity #4: New Sense Inc vs Fish Till U Drop (10 points)
In Activity #4, you will explore one of
the world's most perplexing and serious problems: How can modern man provide
for the needs and wants of the world's growing population while holding damage
to productive resources to a minimum?
You will look at a major debate among economists:
whether the Coase Theorem or a Pigouvian tax works more effectively
in cases involving environmental use and misuse.
The debate among economists currently rages stronger
than ever. Pigouvians accuse Coasians of being ultra right-wing conservatives
who would provide the rich and powerful with unfair advantages in the use of
common or public property. Coasians claim that Pigouvians are disloyal to the
fundamental economic principle that well-defined property rights always bring
about the most efficient and economic use of a resource. Now it’s your turn
and make certain you understand the concepts on
The Basics page.
the situation at
Lake Smiley. As you read, look for examples of the concepts.
two different opinions concerning how such pollution problems might
which method – Coase Theorem or Pigouvian taxes – would provide the
best solution for cleaning up Lake Smiley and why.
brief essay explaining which solution you chose and why. Be careful
to apply (at the least) the concepts on The Basics page – market
failures, public goods, externalities and etc. (Application does not
mean you throw in a word or definition at some point ... it means you
connect them to the situation. There are examples in the Lake Smiley
story of each of the basic concepts and you should be able to identify
Your essay should be thorough, specific,
include relevant concepts from the course material and be free of spelling
and grammar errors.