Public Goods

Question 1

What are the characteristics of a public good

Answer 1

• non-excludable
• non - rivalrous

Question 2

What does it mean to be non excludable

Answer 2

To be non excludable means once a good has been provided, the benefits of consuming the good are not confined to the people who have paid for the goods -> for example street lights and road signs

Question 3

What does it mean to be non rivalrous

Answer 3

To be non rivalrous means that the quantity of a good supplied does not diminish upon consumptions so one person consuming a product doesn’t stop anyone else from consuming the product
- for a radio station -> if one person uses doesn’t stop anyone else form using

Question 4

What are the characteristics of a private good

Answer 4

• excludable
• rivalrous

Question 5

What does it mean to be excludable

Answer 5

If a good is excludable, this means that once a good has been paid for only the person who has bought the good is able to enjoy the benefits of consumption. People who have not paid for the good are excluded form the benefits of consuming the good

Question 6

What does it mean to be rivalrous

Answer 6

The amount of a good available is diminishing upon consumption, when one person consumes a product, there is less of a product available for consumption by others