Chapter 11 - Public Goods and Common Resources Flashcards
Excludability
The property of a good whereby a person can be prevented from using it
Rivalry in Consumption
The property of a good whereby one person’s use diminishes other people’s use.
Private Goods
Goods that are both excludable & rival in consumption
Most goods in the economy are ______.
Private
Public Goods
Goods that are neither excludable nor rival in consumption (ex. tornado siren)
Common Resources
Goods that are rival in consumption but not excludable (ex. fish in the ocean).
Club Goods
Goods that are excludable but not rival in consumption (ex. Town fire department).
Ice cream cones, clothing, and congested toll roads are examples of _______ goods.
Private
Fire protection, cable TV, and uncongested toll roads are examples of _______ goods.
Club
Fish in ocean, the environment, and congested non-toll roads are examples of ________ goods.
Common resources
Tornado siren, national defense, and uncongested non-toll roads are examples of _______ goods.
Public goods
Free-Rider
A person who receives the benefit of a good but avoids paying for it
Cost-Benefit analysis
A study that compares the costs & benefits to society of providing a public good
Tragedy of the Commons
A parable that illustrates why common resources are used more than is desirable from the standpoint of society as a whole.
When one person uses a common resource, they _______ other people’s enjoyment of it.
Diminish
