Chapter 11 - Public Goods and Common Resources

Question 1

Excludability

Answer 1

If people can be prevented from using the good it is excludable

Question 2

Rivalry in Consumption

Answer 2

If one persons use reduces another persons

Question 2

Private Goods

Answer 2

are both excludable and rival in consumption

(someone eats an ice cream cone, someone else cant have it)

Question 2

Public Goods

Answer 2

are neither excludable nor rival in consumption

(A tornado siren, is used by everyone and you cannot take that away from. a specific person)

Question 3

Common Resources

Answer 3

are rival in consumption but not excludable

(Fishing)

Question 3

Club Goods

Answer 3

are excludable but not rival in consumption

(Satellite TV)

Question 3

Free Rider Problem

Answer 3

When a public good gets taken advantage of essentially, no one puts the effort into it nut still uses it and the people providing it face the burden

Question 4

National Defense

Answer 4

When a country is defended you cant stop the people of that country from enjoying that good. So, the free rider problem exists because not many want to enlist but they still enjoy the defense.

Question 5

Basic Research

Answer 5

Knowledge can be an excludable good with patents

Basic knowledge like a math theorem cannot because it is public knowledge and you cant prevent people from knowing it