Chapter 11

Chapter 11 - D. Natural Monopoly 1. Excludable a. Fire...

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I. Chapter 11 A. Private Goods 1. Excludable- you can prevent someone from eating ice cream. 2. Rival in consumption- One person’s use reduces another person’s ability to use it. a. Ex. By eating the ice cream cone, another person cannot eat it B. Public Goods 1. Not excludable- you cannot be prevented from using it. 2. Not rival in consumption- One person’s use does not reduce another person’s ability to use it a. Tornado siren in a small town C. Common Resources 1. Not excludable a. When you catch a fish there are fish for the next person to catch. But it is difficult to stop a fisherman from fishing because the ocean is so large. 2. Rival in consumption a. Fish in the open sea
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Unformatted text preview: D. Natural Monopoly 1. Excludable a. Fire protection can exclude someone from protection 2. Not Rival in Consumption a. There is no additional cost for the fire company to protect one house because the fire company is already paid E. Free Rider- a person who receives the benefits of a good but avoids paying for it F. Cost- Benefit Analysis 1. A study that compares the cost and benefits to society of providing a public good 2. Estimate the total cost of constructing a project G. Tragedy of the Commons- Parable that illustrates why common resources get used more than is desirable from the standpoint of society as a whole...
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This note was uploaded on 09/18/2011 for the course SAS 101 taught by Professor Unsure during the Spring '11 term at Rutgers.

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Chapter 11 - D. Natural Monopoly 1. Excludable a. Fire...

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