Chapter 4

Question 1

Free-Rider

Answer 1

A person who enjoys the benefits of a public good without contributing anything to the cost of financing

Question 2

Lindahl Equilibrium

Answer 2

This exists when the voluntary contribution per unit of the public good of each member of the community equals his or her marginal benefit of the public good at the efficient level of output.

Amount paid by each person for their share of the public good

Question 3

Price-Excludable Public Goods

Answer 3

Public goods with benefits that can be priced.

Question 4

Private Goods

Answer 4

Goods that are rival in consumption

Question 5

Public Goods

Answer 5

Goods with benefits that cannot be withheld from those who do not pay and are shared by large groups of consumers.

Question 6

Pure Private Good

Answer 6

A good that (after producers receive compensation for the full opportunity costs of production) provides benefits only to the person who acquires the good, and not to anyone else.

Question 7

Pure Public Good

Answer 7

This type of good is non-rival in consumption for an entire population of consumers

And its benefits have the characteristics of nonexclusion

Question 8

Congestible Public Goods

Answer 8

Those goods for which crowding or congestion reduces the benefits to existing consumers when more consumers are accommodated.