1.6 Classification of goods and services

Question 1

Define the term “Free Goods”

Answer 1

A free good is a good that is abundant and available without any opportunity cost.

Question 2

Define the term “Economic Goods”

Answer 2

A good or service that provides utility to society, has a degree of scarcity, and incurs an opportunity cost.

Question 3

Define the term “Public Goods”

Answer 3

A good that is both non-excludable and non-rivalrous.

Question 4

Define the term “Private Goods”

Answer 4

A good that is both excludable and rivalrous

Question 5

Define the term “Global Public Goods”

Answer 5

Goods that benefit every country and are both non-excludable and non-rivalrous.

Question 6

Define the term “Public Bad”

Answer 6

A good or service that results in negative externalities and is both non-exclusive and non-rivalrous.

Question 7

Define the term “The Tragedy of Commons”

Answer 7

Lack of property rights.

Question 8

Define the term “Quasi Public Goods”

Answer 8

A good that’s semi non-rivalrous and semi non-excludable.

Question 9

Define the term “Merit Goods”

Answer 9

A merit good is a good or service that is deemed beneficial for individuals and society.

Question 10

Define the term “Demerit Goods”

Answer 10

A good or service that is considered harmful to individuals and society.