Economics 1021A/B Chapter Notes -Free Rider Problem, Marginal Utility, Social Cost

• School: Western University
• Department: Economics
• Course: Economics 1021A/B
• Professor: Michael Parkin

Document Summary

Goods, services, and resources differ in the extent to which people can be excluded form consuming them and in the extent to which one person"s consumption rivals the consumption of others. A good is excludable is it is possible to prevent someone from enjoying its benefits: people must pay to consume the good, example: A good is non-excludable if it is impossible (or extremely costly) to prevent anyone from benefiting from it: example: The services of the police, or fish in the ocean. A good is rival if one person"s use of it does not decrease the quantity available for someone else: example: A fish can only be consumed once. A brinks truck can"t deliver cash to two banks at the same time. A good is non-rival if one person"s use of it does not decrease the quantity available for someone else: one person"s benefit doesn"t lower the benefit of others, example: Private good: both a rival and excludable.