Chapter 19 - Public Goods and Common Resources

Question 1

excludable

Answer 1

a characteristic of a good or service that allows owners to prevent its use by people who have not paid for it

Question 2

rival in consumption (Rival)

Answer 2

the characteristic of a good for which one person’s consumption prevents or decreases others’ ability to consume it

Question 3

private goods

Answer 3

a good that is both excludable and rival (ex: pizza, car)

Question 4

public goods

Answer 4

a good that is neither excludable nor rival (ex: forests, wildlife)

Question 5

common resource

Answer 5

a good that is not excludable but is rival (ex: MP3s, wildlife)

Question 6

artificially scarce good

Answer 6

a good that is excludable but not rival (ex: open-source software)

Question 7

free-rider problem

Answer 7

a problem that occurs when the non-excludability of a public good leads to undersupply

Question 8

tragedy of the commons

Answer 8

the depletion of a common resource due to individually rational but collectively inefficient overconsumption