quanda11 - Chapter 11 1 Consider the rivalry and...

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Practice Questions to accompany Mankiw & Taylor: Economics 1 Chapter 11 1. Consider the rivalry and excludability of each of the following goods. Use this information to determine whether the goods are public goods, private goods, common resources, or produced by a natural monopoly. Explain. a. Fish in a private pond Answer: Rival and excludable, private good. Only one can eat a fish. Since it is private, non-payers can be excluded from fishing. b. Fish in the ocean Answer: Rival but not excludable, common resource. Only one can eat a fish but the ocean is not privately owned so non-payers cannot be excluded. c. Broadcast television signals Answer: Not rival and not excludable, public good. Additional viewers can turn on their TV without reducing the benefits to other consumers and non-payers cannot be excluded. d. Cable television signals Answer: Not rival but excludable, produced by a natural monopoly. More houses can be wired without reducing the benefit to other consumers and the cable company can exclude non-payers. e.
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This note was uploaded on 07/06/2009 for the course BUS BAM303 taught by Professor Na during the Spring '09 term at 東京大学.

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quanda11 - Chapter 11 1 Consider the rivalry and...

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