Ch11 - Chapter 11 Public Goods and Common Resources In this...

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Chapter 11: Public Goods and Common Resources In this chapter, look for the answers to these questions: What are public goods? What are common resources? Give examples of each. Why do markets generally fail to provide the efficient amounts of these goods? How might the government improve market outcomes in the case of public goods or common resources? 5:82/9 ,¡¡¢£ 74¢ 9¡33¡4 ¤*£¡:¤9*£ Introduction We consume many goods without paying: parks, national defense, clean air & water. When goods have no prices, the market forces that normally allocate resources are absent. The private market may fail to provide the socially efficient quantity of such goods. One of the Ten Principles from Chapter 1: *T[JWSRJSYX HFS XTRJYNRJX NRUWT[J RFWPJY TZYHTRJX¡ 5:82/9 ,¡¡¢£ 74¢ 9¡33¡4 ¤*£¡:¤9*£ Important Characteristics of Goods A good is excludable if a person can be prevented from using it. *xHluIFGlJ : fish tacos, wireless internet access 4ot JxHluIFGlJ : FM radio signals, national defense A good is rival in consumption if one person’s use of it diminishes others’ use. ¤NvFl : fish tacos 4ot rNvFl : An MP3 file of Lady Gaga’s latest single 5:82/9 ,¡¡¢£ 74¢ 9¡33¡4 ¤*£¡:¤9*£ The Different Kinds of Goods Private goods : excludable, rival in consumption Example: food Public goods : not excludable, not rival Example: national defense Common resources : rival but not excludable Example: fish in the ocean Natural monopolies : excludable but not rival Example: cable TV A road is which of the four kinds of goods?-Nnt : The answer depends on whether the road is congested or not, and whether it’s a toll road or not. Consider the different cases....
View Full Document

This note was uploaded on 03/22/2011 for the course ECON 200 taught by Professor Ta during the Spring '07 term at University of Washington.

Page1 / 23

Ch11 - Chapter 11 Public Goods and Common Resources In this...

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online