11 4b Key Concepts excludability the property of a good whereby a person can be

11 4b key concepts excludability the property of a

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11-4b Key Concepts excludability the property of a good whereby a person can be prevented from using it rivalry in consumption the property of a good whereby one person's use diminishes other people's use 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 club goods goods that are excludable but not rival in consumption free rider a person who receives the benefit of a good but avoids paying for it cost-benefit analysis a study that compares the costs and benefits to society of providing a public good Tragedy of the Commons a parable that illustrates why common resources are used more than is desirable from the standpoint of society as a whole 11-4c Questions For Review
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1.Explain what is meant by a good being “excludable.” Explain what is meant by a good being “rival in consumption.” Is a slice of pizza excludable? Is it rival in consumption? 2.Define and give an example of a public good. Can the private market provide this good on its own? Explain. 3.What is cost-benefit analysis of public goods? Why is it important? Why is it hard? 4.Define and give an example of a common resource. Without government intervention, will people use this good too much or too little? Why? 1. Think about the goods and services provided by your local government.
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a. Using the classification in  Figure 1 , explain which category each of the following goods falls into: police protection snow plowing education rural roads
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city streets b. Why do you think the government provides items that are not public goods? 2.Both public goods and common resources involve externalities.a. Are the externalities associated with public goods generally positive or negative? Use examples in your 
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