So private decisions about consumption and production can lead to an

So private decisions about consumption and production

This preview shows page 7 - 13 out of 22 pages.

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PUBLIC GOODS AND COMMON RESOURCES 8 .
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PUBLIC GOODS AND COMMON RESOURCES 9
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PUBLIC GOODS AND COMMON RESOURCES 10 Some Important Public Goods National defense Knowledge created through basic research Fighting poverty
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PUBLIC GOODS AND COMMON RESOURCES 11 Common Resources Like public goods, common resources are not excludable. Cannot prevent free riders from using Little incentive for firms to provide Role for govt: seeing that they are provided Additional problem with common resources: rival in consumption Each person’s use reduces others’ ability to use Role for govt: ensuring they are not overused
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PUBLIC GOODS AND COMMON RESOURCES 12 The Tragedy of the Commons A parable that illustrates why common resources get used more than is socially desirable.
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