Mixed Goods

Question 1

Pure public good characteristics

Answer 1

-non rival, non excludable
-external benefit = suboptimal provision of public goods = economic inefficiency
-undersupply & under investment
-free riding

Question 2

Types of public goods

Answer 2

-best shot
-weaker link
-weakest link
-aggregate
-additive

Question 3

Best shot

Answer 3

Benefit to all determined by most effective provider
-free riding has no impact
-incentive to supply as long as marginal benefit > marginal cost

Question 4

Weakest link

Answer 4

Overall consumption level is only as large as smallest provision level to group
-conservation should begin here
-free riding a problem
-supply incentives weak

Question 5

Weaker link

Answer 5

Greater efforts by some can offset less vigilant efforts by others
-supply incentives weak
-free riding a problem
-conservation should begin here

Question 6

Aggregate

Answer 6

Each providers contribution is imperfect substitute for another provider (weighted sum)
-strong incentives to undersupply
- strong free riding incentives

Question 7

Additive

Answer 7

Every providers contribution to effort is perfect substitute for anothers
-strong incentive to undersupply
-strong free riding incentive

Question 8

Living renewable public good externalities

Answer 8

-user cost
-public good externality

Question 9

User cost

Answer 9

Harvesting too small, too young or wrong time