9: public goods and common goods Flashcards

1
Q

excludable

A

if people
(ordinarily, people who have not
paid for it) can be prevented from
using it.

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2
Q

rival

A

if one person’s consumption of a good necessarily diminishes another person’s consumption of it.

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3
Q

*Private Goods:
Excludable; Rival in consumption
*Public Goods:
Not excludable; Not Rival
*Common Resources:
Not excludable; Rival
*Natural Monopolies:
Excludable; Not Rival

A
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4
Q

A good is excludable if someone can be prevented from using it. A
good is rival in consumption if one person’s use reduces other’s ability
to use the same unit of the good.

A
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5
Q

Markets work best for private goods, which are excludable and rival
in consumption. Markets do not work well for other types of goods.

A
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6
Q

Public goods, such as national defense and fundamental knowledge,
are neither excludable nor rival in consumption.

A
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7
Q
A
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