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<br />effects and public goods. <br /> <br />. <br /> <br /> <br />. <br /> <br />of the river conflicts with the well-being of others in the nature and <br /> <br />w <br />w <br />(0 <br />~ <br /> <br />extent of water uses. An idealized competitive economy will yield an <br /> <br />. <br /> <br />allocation of resources such that no alternative pattern of resource use <br /> <br />will make anyone better off without making someone else worse off. <br /> <br />Such anallocation of resources is said to be "economically effecient", <br /> <br />. <br /> <br />and given the distribution of income and the availability of resources, <br /> <br />it is the pattern of resource allocation which will most completely satisfy <br /> <br />. <br /> <br />human wants. <br /> <br />The ideal competitive economy does not exist in this case because <br /> <br />of "market failures", Current prices do not correctly reflect the full <br /> <br />. <br /> <br />social value of resources and commodities and thus, misallocation of <br /> <br />resources occurs. Market failures are essentially of two kinds, external <br /> <br />Public Goods. "Public goods" is a type of market failure that occurs <br /> <br />where a public (or collective) good is used simultaneously by more than <br /> <br />. <br /> <br />one individual. Producers of public goods are unable to collect revenues <br /> <br />from beneficiaries, since users cannot be excluded from consuming the <br /> <br />good, even if they do not pay for it. Each user will expect to reap the <br /> <br />. <br /> <br />benefits whether or not he pays the cost. In this case, the private market <br /> <br />is unlikely to supply optimal amounts of goods with collective consumption <br /> <br />. <br /> <br />chara,cteristics. We will return later to the "public goods" problem on <br /> <br />the Colorado River. <br /> <br />. <br /> <br />2 <br /> <br />. <br />