chapter 17 key terms

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

A private good is ? in consumption, and is ?

rival, excludable

A market for a private good with no externalities produces an ? quantity of goods.

efficient

national defense

nonexcludable, non-rivalrous

A club good is ? in consumption, and is ?

nonrival, excludable

A public good is ? in consumption and is ?

nonrival, non excludable

examples of a public good

public sanitation, national defense, scientific research

A common resource is ? in consumption and is ?

rival, non excludable

private good

a good that is both excludable and rival in consumption

example fo common resources

clean water, biodiversity

a hot pocket sandwich

excludable rivalrous

Pay-Per-View cable television

excludable, nonrivalrous

a unicycle

excludable, rivalrous

pajamas

excludable, rivalrous

private classroom education

excludable, rivalrous

Bob can pay to support his local public radio station, which depends on donations to be as effective as possible. Bob listens to the radio station several hours per day but never donates since he suspects that other people will donate enough to keep the station on the air.

free riding

Jim is working on a group project for a class in which he wants a high grade. However, since the grades are assigned to the group as a whole and he knows that the other group members will pick up most of the extra work, Jim calls in sick and plays video games on his Dream Station 64.

free riding

nonrivial in consumption

if more than one person can consume the same unit of the good at the same time, than a good is this

Excludable

if the supplier of that good can prevent people who do not pay from consuming it, then a good is this

common resources left to the market suffer from overuse

individuals ignore the fact that their use depletes the amount of the resource remaining for others

A market for a common resource produces an ? quantity.

inefficient

A market for a public good produces an ? quantity.

inefficient

A market for an artificially scare good, also known as a club good, produces an ? quantity.

inefficient

public good

is both non excludable and nontrivial in consumption

common resource

is nonexcludable and rival in consumption: you can't stop me from consuming the good, and more consumption by me means less of the good available for you

goods that are nonexcludable suffer from the free rider problem

many individuals are unwilling to pay for their own consumption and instead will take a "free ride" on anyone who does pay, goods that are nonexcludable suffer from this

Drew always buys the lunch special for $5 at the restaurant across the street from where he works. If he decided to eat at the restaurant after 3:00 p.m., however, he would be unable to get the lunch special, and would instead have to pay $10 for the same food.

not free riding

Karl never drives at night, and gets no benefit from street lamps at all. Street lamps are nonexcludable and nonrival in consumption. When the community group tries to collect money to build street lamps, Karl does not donate any money.

not free riding

example of artificial scare goods

on demand movies, computer software

cost-benefit analysis

the estimation and comparison of the social costs and social benefits of providing a public good

rival in competition

the same unit of the good cannot be consumed by more than one person at the same time, then a good is this

nonexcludable

the supplier cannot prevent consumption by people who do not pay for it, a good is this

artificially scare good

a good that is excludable but nonrival in consumption

Select the best definition of a public good.

a good that is nonexcludable and nonrival in consumption

example of private goods

wheat, bathroom fixtures


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