Public Goods and Common Resources

Public Goods and Common Resources - Public Goods and Common...

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Public Goods and Common Resources
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Introduction When goods are available free of charge, the market forces that normally allocate resources in our economy are absent. When a good does not have a price attached to it, private markets cannot ensure that the good is produced and consumed in the proper amounts.
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Different Kinds of Goods Excludability refers to the property of a good whereby a person can be prevented from using it. Rivalry in consumption refers to the property of a good whereby one person’s use diminishes other people’s use.
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Different Kinds of Goods Four Types of Goods Private Goods Goods that are both excludable and rival in consumption Public Goods Goods that are neither excludable nor rival in consumption Common Resources Goods that are rival in consumption but not excludable Natural Monopolies Goods that are excludable but not rival in consumption
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Four Types of Goods Rival? Yes
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This note was uploaded on 04/07/2008 for the course ECO 210 taught by Professor Sun during the Fall '08 term at Grand Valley State University.

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Public Goods and Common Resources - Public Goods and Common...

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