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Unformatted text preview: Rikki Norton Microeconomics Chapter 11 Questions for Review (1, 2, 3, 4) 1. A common resource is a good that is rival in consumption but is not excludable. An example of a common resource is common grazing land. Without government intervention people would use too much or too little of a good because they are not charged for the common use. 2. The cost-benefit analysis of public goods is a study that compares the cost and benefits to a society of providing a public good, for example building a new highway. The cost-benefit analysis of public goods is important because it determines whether or not it is cost worthy for the society. It is hard to use the cost-benefit analysis of public goods because they do not have any specific price signals to go off of, so all findings are rough approximations. 3. A public good is a good that is neither excludable nor rival in competition, an example of a 3....
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This note was uploaded on 03/14/2011 for the course POLSCI 1123 taught by Professor Thompson during the Spring '11 term at Oklahoma State.
- Spring '11