Chapter 11 Questions for Review answers

Chapter 11 Questions for Review answers - 1 .Agoodthatis '...

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Chapter 11 Questions for Review answers 1. An excludable good is one that people can be prevented from using. A good that is  rival in consumption is one for which one person's use of it diminishes another  person's enjoyment of it. Pizza is both excludable, because a pizza producer can  prevent someone from eating it who doesn't pay for it, and rival in consumption,  because when one person eats it, no one else can eat it. 2. A public good is a good that is neither excludable nor rival in consumption. An  example is national defense, which protects the entire nation. No one can be  prevented from enjoying the benefits of it, so it is not excludable, and an additional  person who benefits from it does not diminish the value of it to others, so it is not rival  in consumption. The private market will not supply the good, because no one would 
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