Ch 15 Public Goods and Common Resources

Ch 15 Public Goods and Common Resources - Public Goods and...

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Public Goods and Common Resources Chapter 15 1
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Classifying Goods Goods can be classified in two ways: who can be excluded and to what extent one’s consumption affects another Definitions: Excludable : a good is excludable if only the people who pay for it are able to enjoy its benefits. Examples: concert, private security, restaurant food Nonexcludable : a good is nonexcludable if 2
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Classifying Goods Effects on others consumption Definitions: Rival : use of the good by one person reduces the quantity for anyone else Example: fish consumption, most commodities, private security Nonrival : use by one person does not reduce the quantity available for anyone else Example: concert on network TV, some police services (i.e. writing traffic tickets benefits all other 3
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Combined Classification Private Goods Rival and Excludable Natural Monopolies Nonrival and Excludable Common Resources Rival and Nonexcludable 4
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Combined Classification 5 Overused
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Ch 15 Public Goods and Common Resources - Public Goods and...

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