9: public goods and common goods

Question 1

excludable

Answer 1

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

Question 2

rival

Answer 2

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

Question 3

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

Question 4

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.

Question 5

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

Question 6

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