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
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