ECON 1000 Chapter Notes - Chapter 17: Government Failure, Social Cost, Market Failure

• School: York University
• Department: Economics
• Course: ECON 1000
• Professor: Steven Edwards

Document Summary

Goods, services and resources differ in the extent to which people can be excluded from (cid:272)o(cid:374)su(cid:373)i(cid:374)g the(cid:373) a(cid:374)d the e(cid:454)te(cid:374)t to (cid:449)hi(cid:272)h o(cid:374)e pe(cid:396)so(cid:374)"s (cid:272)o(cid:374)su(cid:373)ptio(cid:374) (cid:396)i(cid:448)als the consumption of others. A good is excludable if it is possible to prevent someone from enjoying its benefits. B(cid:396)i(cid:374)ks se(cid:272)u(cid:396)it(cid:455) se(cid:396)(cid:448)i(cid:272)es, cooke a(cid:395)ua(cid:272)ultu(cid:396)e"s fish, a(cid:374)d a u2 (cid:272)o(cid:374)(cid:272)e(cid:396)t a(cid:396)e e(cid:454)a(cid:373)ples. A good is nonexcludable if it is impossible (or extremely costly) to prevent anyone from benefiting from it. The services of the calgary police, fish in the atlantic ocean, and a concert on network television are examples. When a police cruiser enforces the speed limit, everyone on the highway benefits; anyone with a boat can fish in the ocean; and anyone with a tv can watch a network broadcast. A good is (cid:396)i(cid:448)al if o(cid:374)e pe(cid:396)so(cid:374)"s use of it de(cid:272)(cid:396)eases the (cid:395)ua(cid:374)tit(cid:455) a(cid:448)aila(cid:271)le fo(cid:396) so(cid:373)eo(cid:374)e else. A b(cid:396)i(cid:374)ks t(cid:396)u(cid:272)k (cid:272)a(cid:374)"t deli(cid:448)e(cid:396) (cid:272)ash to t(cid:449)o (cid:271)a(cid:374)ks at the same time.