ECON 101 Lecture Notes - Lecture 2: Totalitarianism, Common-Pool Resource
Document Summary
Chapter two - markets and society explanation of markets. Without households, the private sector would not exist and vice versa. Arti cially scare goods (cable tv, department store, cinemas, etc) 1 excludable - you have to be able to afford it. Rival - another consumer can prevent you from obtaining the good. Rival - example: sh are scarce - competition between shermen . 3 excludable - have to be able to afford it. Non-rival - no competition for air or news consumption. *markets can only handle scenario 1, scenarios 2, 3, and 4 are extremely dif cult to be maintained by markets. A mechanism - price goes up, you buy less