11 answers - Quiz 11 PUBLIC GOODS AND COMMON RESOURCES...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Quiz 11 PUBLIC GOODS AND COMMON RESOURCES Questions for Review 1. An excludable good is one that people can be prevented from using. A good that is rival in consumption is one for which one person's use of it diminishes another person's enjoyment of it. Pizza is both excludable, because a pizza producer can prevent someone from eating it who doesn't pay for it, and rival in consumption, because when one person eats it, no one else can eat it. 2. A public good is a good that is neither excludable nor rival in consumption. An example is national defense, which protects the entire nation. No one can be prevented from enjoying the benefits of it, so it is not excludable, and an additional person who benefits from it does not diminish the value of it to others, so it is not rival in consumption. The private market will not supply the good, because no one would pay for it because they cannot be excluded from enjoying it if they don't pay for it. 3.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/20/2011 for the course ECON 123 taught by Professor Mrews during the Spring '11 term at Korea Advanced Institute of Science and Technology.

Ask a homework question - tutors are online