Ch 15 - Definition: A public good is a good that is...

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A “public good” is a good that is “_ nonrival __” in consumption. • “______ nonrival ____” means that any number of people can consume the good simultaneously; one person’s consumption of the good does not diminish another person’s ability to consume the good at the same time. • Individuals __ collectively ___ consume the good (“joint consumption”) Examples: - light from a ___ lighthouse ___ (once it is built and operating, many ___ ships ____ can simultaneously benefit from its guidance) - a __ dam _____ (simultaneously protects many people against ___ floods _____) - __ radio _____ broadcast - national ___ defense _______ • Public goods also have the notion of “nonexcludability” – difficult or costly to prevent someone from consuming the good • In contrast, most goods are “__ private _______ goods” in that only one person can consume a given amount of the good. Example:
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This note was uploaded on 08/31/2011 for the course ECON 101 taught by Professor Brentkreider during the Fall '07 term at Iowa State.

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Ch 15 - Definition: A public good is a good that is...

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