4.1.8.3 Types Of Goods Flashcards
Properties of private goods
Excludable
Have property rights
Rivalrous
E.g box of chocolate
Properties of public goods
Non-excludable
No property rights
Nonrivalrous
E.g defence / lighthouses
Meaning of excludable
The use of the good cannot be restricted.
Meaning of non-excludable
Cannot exclude anyone from the good
What doe rivalrous mean
Consumption from one person prevents consumption from another
What does non-rivalrous mean
Consumption by one person does not reduce availability to others
How does non-excludability and non-rivalrous lead to market failure
Those who do not pay still receive benefits, so if no one pays there will be a free rider problem
How might the govt intervene to stop market failure
The govt produces the good
What are quasi-public goods
Have some characteristics of public goods.
Semi-non-excludable- it is difficult/costly to exclude non-paying customers
-free riders can be excluded
-semi-non-rival goods = non diminishable
-e.g. police
How have advances in technology changed the nature of public goods
Makes it easier to exclude free riders
What is the ‘tragedy of the commons’
When common resources get used too much then the resources eventually run out
-common resources have no property rights
What is sometimes referred to as the ultimate tragedy
Climate change
