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Unformatted text preview: Microeconomics Chapter 11 Public Goods and Common Resources Introduction When goods are available free of charge, the market forces that normally allocate resources in our economy are absent 11-1 the Different Kinds of Goods Excludable goods – people can be prevented from using the good Rival goods – ones person’s use of the good reduces another person’s ability to use it Private Goods – excludable and rival in consumption Public Goods – neither excludable nor rival in consumption Common Resources – rival in consumption but not excludable Natural Monopoly – excludable but not rival in consumption 11-2a The Free-Rider Problem A free rider is a person who receives the benefit of a good but does not pay for it Because people would have an incentive to be free riders rather than ticket buyers, the market...
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This note was uploaded on 09/27/2011 for the course ECON 101 taught by Professor Baggins during the Spring '08 term at Manhattan College.
- Spring '08