Module 37 Economics

Estimate

A cost-benefit analysis offers an _________________ because it is difficult to put a monetary value on certain benefits

Federal tax revenue

Federal income that comes from federal income taxes and payroll taxes paid by employers

Payroll taxes

Federal taxes deducted from payroll to pay for programs such as Medicare

Private goods

Goods that are excludable and rival; for example, if you purchase a laptop, someone else cannot also purchase that same laptop, thus it is rival. In addition, the computer is excludable, because you must pay for the computer in order to use it

Club goods

Goods that are excludable but are non-rival; think about a movie theater. For the most part, when you buy a movie ticket, it does not prevent another person from buying a ticket to the same movie. Therefore, the good is non-rivalous. However, if you do not pay the price of the ticket, you cannot enter the theater to view the movie, so it is still excludable

Public goods

Goods that are non-excludable and non-rival; broadcast television is a good example. One person's viewing of a channel does not prevent another person's ability to view that same channel, so it is not rival. Even if you do not pay for cable service, you still will be able to view broadcast television, so it is not excludable (also includes military protection from the USFG)

Common-pool resources

Goods that are non-excludable and rival; for example, a lake in a public park stocked with fish is a good that does not exclude anyone, because they do not need to pay to enjoy the park. However, there are only so many fish in the lake to catch, so when a person catches a fish and keeps it, no one else may catch that same fish, making it a rival good

Non-rival

One person's use of a good does not reduce anyone else's use of it. When you turn on the television to watch a show, you do not reduce anyone else's ability to see that same program

Private sector

Part of the economy that is privately run

Rival

Prevents another consumer from using that good at the same time. For example, if one person is using a hammer, another person cannot use the same hammer

Free-rider

Situation that occurs when non-payers receive free goods and services

Non-payers benefit

Those who benefit from non-excludable (public) goods and services with no direct cost

Excludable

When a consumer may not use the good unless the consumer pays for it. A laptop is an example of this because a consumer must pay for it to use it

Non-excludable

When all people can use it, even if they do not pay for it. A lighthouse is an example—anyone can see the signal from the lighthouse