Property of a good whereby a person can be prevented from using it

Rivalry in Consumption:

Property of a good whereby one person’s use diminishes other people’s use

Excludable and rival in consumption

Not excludable nor rival in consumption

Rival in consumption but not excludable

Excludable but not rival in consumption

Person who receives the benefit of a good but avoids paying for it

Public goods aren't excludable, prevents private markets from supply goods, market failure

How governments can fix free rider problem:

if total benefits of a public good exceeds its cost; problem: measuring the benefit tends to be difficult

Important Public Goods:

National defense, basic research, fighting poverty

Cost-Benefit Analysis:

Study that compares costs and benefits to society of providing a public good (Estimate total costs and benefits of the project to society as a whole)

Tragedy of the Commons:

Illustrates why common resources are used more than is desirable from societies standpoint as a whole

Important Common Resources:

Clean air and water, congested roads, wildlife, fishing and hunting licenses

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Chap 11 Econ

Question	Answer
Excludability:	Property of a good whereby a person can be prevented from using it
Rivalry in Consumption:	Property of a good whereby one person’s use diminishes other people’s use
Private Goods:	Excludable and rival in consumption
Public Goods:	Not excludable nor rival in consumption
Common Resources:	Rival in consumption but not excludable
Club Goods:	Excludable but not rival in consumption
Free Rider:	Person who receives the benefit of a good but avoids paying for it
Free Rider Problem:	Public goods aren't excludable, prevents private markets from supply goods, market failure
How governments can fix free rider problem:	if total benefits of a public good exceeds its cost; problem: measuring the benefit tends to be difficult
Important Public Goods:	National defense, basic research, fighting poverty
Cost-Benefit Analysis:	Study that compares costs and benefits to society of providing a public good (Estimate total costs and benefits of the project to society as a whole)
Tragedy of the Commons:	Illustrates why common resources are used more than is desirable from societies standpoint as a whole
Important Common Resources:	Clean air and water, congested roads, wildlife, fishing and hunting licenses

Created by: IanMcCormick20

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