lectur6-page48

lectur6-page48 - When you are reading this, or they are...

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48 48 Public Goods COLLECTIVE CONSUMPTION: u Many people can consume the same units of a good or service simultaneously. u consumption of the good by one person does not diminish the amount available for anyone else. In order to have a pure public good, two characteristics must be present. Public goods are collectively consumed, and no one can be excluded from consuming the good once it is produced. When a commodity is collectively consumed, it means that many people can consume the same units of the good or service simultaneously, and consumption of the good or service by one person does not diminish the amount available for anyone else. Huh? Look, there could be 5,000 people reading what is written here scattered all over the world. If a person has a computer with internet access, they can get what you are looking at right now.
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Unformatted text preview: When you are reading this, or they are reading this, you all are collectively consuming what is here. When you go to a movie, everyone in the movie theater with you is collectively consuming the movie. As you quietly watch the movie, you do not diminish the value of the movie to anyone else. When you are driving around the Raleigh beltline, you are collectively consuming the road with the thousands of other motorists. Do you have a handle on collective consumption now? Remember, just because a commodity can be collectively consumed does not make it a public good. Public goods must have two characteristics. The second characteristic of a public good is the inability to exclude people from consuming the commodity once it is produced....
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This note was uploaded on 12/29/2011 for the course ECO 210 taught by Professor Malls during the Fall '10 term at SUNY Stony Brook.

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