Drinking Milk and Drilling Oil
Posted by Robert Whaples on October 29, 2009
I returned my second midterm exam yesterday. The students did pretty well — although I was a little disappointed that many students didn’t get the gist of this question (which I had included on a practice study sheet): “True/False/Ambiguous and Explain Why: During the Texas oil rush in the early 1900s, oil wells crowded the landscape (e.g. the photo on page 349 of our text). This was an efficient market response.” This question comes almost directly from the “Challenges” section of Chapter 17 (which focuses on the tragedy of the commons) — and I love the accompanying photo of two cute little kids sharing a glass of cold chocolate milk and part c of the question in the book, which asks “Why did we put these two questions together?”
On Friday we begin macro!
Robert Johnson said
So, not efficient because of externalities I guess. I never finished my econ degree (switched to engineering), but that one seems pretty straightforward.