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Chapter 11

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Rita Cossa

Chapter 11­ Public Goods Excludability: people can be prevented from using the good or service. •Example: You can’t attend a Buffalo Bills home game unless you have a ticket. Rivalry: one person’s use of the good diminishes the ability of another person to use it. •Example: I park in a free lot, taking up a space that someone else might have wanted. 1. Private Goods •These are both excludable and rival. •Example: a chocolate bar •It’s excludable: you can’t have one if no one will give or sell you one. •It’s rival: if I’m eating one, you can’t eat the same one. 2. Public Goods •These are neither excludable nor rival. •Example: fireworks displays •They aren’t excludable: you can’t keep people from looking up into the sky and enjoying them. •They aren’t rival: one person’s enjoyment of the show doesn’t take away from someone else’s enjoyment. 3. Common Resources •These are rival but not excludable. •Example: fish in the ocean •They are rival: every fish you catch means fewer fish for the next person to catch. •They are not excludable: the ocean is so big that you can’t keep someone from fishing if they really want to fish (they’ll find a spot somewhere). 4. Natural Monopoly Goods •These are excludable but not rival. •Example: cable TV •It’s excludable: you can’t get it if you don’t subscribe. •It’s not rival: your enj
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