Section 7 Flashcards
What is the definition of rival in consumption
The property of a good whereby one persons use diminishes other peoples use
What is the definition of a private good
Goods that are both excludable and rival
What is the definition of the public good
Goods that are neither excludeable nor rivals
What is the definition of common resources
Goods that are rival but not excludable
What is the definition of a club good
Goods that are excludable but not rival
What is a free rider
A person who receives the benefit of a good but avoids paying for it
What is the tragedy of the commons
Parable that illustrates why common resources get used more then is desirable from the standpoint of society as a whole
When does the tragedy of the commons arise
Because of an externality
The problems we consider in these chapters a rise in many different markets but they share a common theme in all cases the market fails to allocate resources efficiently because of what
Property rights are not well established
What is the definition of excludability
The property of a good whereby a person can be prevented from using it
If the good is nonexcludable that means
It is not possible to prevent an individual from using the good
It’s a good his rival in consumption that means
Consumption of the good by one person decreases the ability of other people to consume the good
