CH-11 PPT - Chapter11 Public Goods and Common Resources...

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Click to edit Master subtitle style Public Goods and Common Resources M icroeconomics P R I N C I P L E S   O F N. Gregory Mankiw Chapter 11
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Excludability and Rivalry Excludability is the property of a good whereby a person can be prevented from using it. Rivalry is the property of a good whereby one person’s use diminishes other people’s use.
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Public Goods and Common Resources Public goods are goods that are neither excludable nor rival in consumption. Common resources are goods that are rival in consumption but not excludable.
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Two Questions What is the efficient level of the public good? How can we provide the efficient level of a public good?
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Two Questions What is the efficient level of the public good? How can we provide the efficient level of a public good?
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10 25 4 7 11 3 6 9 Private valueA Private valueB $ Public good Social cost = Private cost Social value
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Two Questions What is the efficient level of the public good?
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CH-11 PPT - Chapter11 Public Goods and Common Resources...

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