Chapter 11

Chapter 11 - Chapter 11; Public Goods and Common Resources...

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Chapter 11; Public Goods and Common Resources Goods without prices provide a special challenge for economic analysis When goods are available free of charge the market forces that normally allocate resources are absent The Different Kinds of Goods Buyers and sellers in a market typically do not take into account the external effects of their decision Excludable: People can be prevented from using the good Rival in Consumption: One person’s use in the good reducer’s another person’s ability to use it Private goods: Both excludable and rival in consumption You don’t get one unless you pay, once you have it, you are the only person who benefits Public goods: neither excludable nor rival in consumption People cannot be prevented from using a public good, and person’s use does not reduce another person’s ability to use it Common resources: goods that are rival in consumption but no excludable Natural Monopoly: when a good is excludable but not rival in consumption
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This note was uploaded on 01/08/2012 for the course EC 101 taught by Professor Idson during the Fall '08 term at BU.

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Chapter 11 - Chapter 11; Public Goods and Common Resources...

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