GOODS Flashcards
What does rivalry in goods mean?
Rivalry means that one person’s use of a good reduces its availability for others. If one person consumes it, there is less (or none) left for someone else.
What is excludability in the context of goods?
Excludability refers to whether it is possible to prevent people from using a good if they do not pay for it.
Define a private good and give an example.
A private good is both rival and excludable. Examples include food, clothing, and personal electronics.
What is a club good, and can you give an example?
Club goods are non-rival but excludable; one person’s use does not reduce availability, but access can be restricted. Examples include private parks, subscription services, and cinemas.
: What are common resources? Provide an example.
Common resources are rival but non-excludable; they can be used by anyone but are limited, so overuse is possible. Examples include fish in the ocean and clean air.
Describe a public good and give an example.
A public good is both non-rival and non-excludable. Examples include national defense, public fireworks displays, and street lighting.
Explain the free rider effect.
he free rider effect occurs when individuals benefit from a good without paying for it, which is common with public goods since people cannot be excluded from using them.
