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QUASI-PUBLIC GOOD: A good that is easy to keep nonpayers from consuming, but use of the good by one person does not prevent use by others. Also termed a near-public good,the trick with a quasi-public good is that it is easy to keep people away, and thus you can charge them a price for consuming, but there is no real good reason to do so. From an efficiency view, the more people who consume a quasi-public good, the better off society. This mixture of nearly unlimited benefits and the ability to charge a price means that some quasi-public goods are sold through markets and others are provided by government. For efficiency's sake, none should be sold through markets.
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Lesson 7: Market Equilibrium | Unit 5: The Method
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Page: 20 of 22
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Topic:
Too Much Production
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This market has a 50-cent price and a 400-tape quantity in equilibrium.- Note the demand price and the supply price if the quantity is 500 tapes.
- The demand price is 40 cents. This is the value of the good produced.
- The supply price is 60 cents. This is the value of goods not produced.
- Producing this quantity is the same as giving up 60 cents and getting 40 cents in return.
- 500 tapes is not an efficient use of resources
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MONEY CREATION, THE PROCESS The process in which the banking system creates checkable deposits by lending excess reserves. The total amount of checkable deposits (and money) created by the banking system depends on the amount of excess reserves available and the reserve requirement ratio specifying the reserves needed to back up deposits. The money creation process is the movement of reserves from bank to bank, with each bank using excess reserves to make loans (and checkable deposits), then keeping a fraction of the reserves to back up newly created deposits. The deposit expansion multiplier captures the money creation process, indicating the amount of checkable deposits created if the banking reserve acquires a given amount of excess reserves.
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Cyrus McCormick not only invented the reaper for harvesting grain, he also invented the installment payment for selling his reaper.
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"The majority of men meet with failure because of their lack of persistence in creating new plans to take the place of those that fail. " -- Napoleon Hill, author
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FIML
Full Information Maximum Likelihood
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