3.3 Public Goods Flashcards
(8 cards)
1
Q
What are public goods?
A
1) Non-rival
2) Non-excludable
3) Non-rejectable
2
Q
What are private goods?
A
1) Rival in consumption
2) Excludable
3) Rejectable
3
Q
What are quasi-public goods?
A
1) Semi-non-excludable
2) Semi-non-rival
4
Q
What is excludability?
A
Consumers can be excluded if they don’t pay
5
Q
What is rival in consumption?
A
One person’s consumption can reduce amount left for other consumers
6
Q
What is rejectability?
A
Consumers can choose to not use the product
7
Q
What is the Free-Rider Problem?
A
- Hard to charge people for a non-excludable good
- Free riders will not pay for their use
- Public goods not produced by private market
8
Q
What is a common pool resource?
A
- No one owns a resource
- Leads to over-use
- Tragedy of the Commons
