welfare economics: consideration of externalities in the agricultural production process eduardo...

11
Welfare Economics: Consideration of Externalities in the Agricultural Production Process Eduardo Segarra Professor of Agricultural and Applied Economics Texas Tech University

Upload: calvin-chambers

Post on 13-Dec-2015

214 views

Category:

Documents


1 download

TRANSCRIPT

Page 1: Welfare Economics: Consideration of Externalities in the Agricultural Production Process Eduardo Segarra Professor of Agricultural and Applied Economics

Welfare Economics: Consideration of Externalities in the Agricultural

Production Process

Eduardo SegarraProfessor of Agricultural and Applied Economics

Texas Tech University

Page 2: Welfare Economics: Consideration of Externalities in the Agricultural Production Process Eduardo Segarra Professor of Agricultural and Applied Economics

D

P

Q

B

Page 3: Welfare Economics: Consideration of Externalities in the Agricultural Production Process Eduardo Segarra Professor of Agricultural and Applied Economics

D

P

QQ*

P*

Page 4: Welfare Economics: Consideration of Externalities in the Agricultural Production Process Eduardo Segarra Professor of Agricultural and Applied Economics

QQ*

D

P

Consumer Surplus

P*

Page 5: Welfare Economics: Consideration of Externalities in the Agricultural Production Process Eduardo Segarra Professor of Agricultural and Applied Economics

P

Q

S

C

Page 6: Welfare Economics: Consideration of Externalities in the Agricultural Production Process Eduardo Segarra Professor of Agricultural and Applied Economics

P

Q

S

Q*

P*

Page 7: Welfare Economics: Consideration of Externalities in the Agricultural Production Process Eduardo Segarra Professor of Agricultural and Applied Economics

Producer Surplus

P

Q

S

Q*

P*

Cost ofProduction

Page 8: Welfare Economics: Consideration of Externalities in the Agricultural Production Process Eduardo Segarra Professor of Agricultural and Applied Economics

D

P

Q

CS

Total Surplus = CS + PS

PS

Q*

S

P*

Cost of Prod.

Page 9: Welfare Economics: Consideration of Externalities in the Agricultural Production Process Eduardo Segarra Professor of Agricultural and Applied Economics

P

QQ*

P*

P

QQ*

E

WExternality Cost

CS

PS

E*

Page 10: Welfare Economics: Consideration of Externalities in the Agricultural Production Process Eduardo Segarra Professor of Agricultural and Applied Economics

P

Q

P

Q

P

Q

A

B

C

D

S

Q* Q1

ED

ES

M EXPORTING COUNTRY

M

K

S

D

Q5 Q*

M IMPORTING COUNTRY

F

G

HDE

I J

K

I + JWORLD PRICE

Page 11: Welfare Economics: Consideration of Externalities in the Agricultural Production Process Eduardo Segarra Professor of Agricultural and Applied Economics

P

Q

P

QQ* Qf Qf Q*

E I

P

Q

P

Q

P

Q

A

B

C

D

S

Q* Qf

ED

ES

K

S

D

Qf Q*

F

G

HDE

I J K

I + JWORLD PRICE