Public Goods and Common Resources (Chapter 8)

are things that everyone can use and using them doesn’t stop others from using them as well

Two Main Characteristics of public goods?

it’s tough to keep someone from using them, even if they don’t pay for it

when one person uses a public good, it doesn’t reduce how much is left for others

since everyone benefits, everyone pays a little through taxes

the government can build and maintain things like parks and street lighting

sometimes, the government can encourage businesses to provide public goods with incentives or regulations

are both excludable and rivalrous in consumption

means that these goods can be owned or controlled by someone, and when one person uses them, it reduces their availability for others

are rivalrous in consumption but not excludable

• means that when one person uses these resources, it reduces the availability for others, but it’s difficult to prevent people from using them

the consumption / use of the good or service by one person reduces the availability of the good or service to another person

• that may only be possessed or consumed by a single user

– that cannot be exclude a certain individual or group of individuals from using them

are excludable but not rival in consumption

means that access to these goods can be controlled or limited, but when one person uses them, it doesn’t significantly affect their availability for others

the degree to which a good, service or resources can be limited to only paying costumers

that consumption of a good by one person does not reduce the amount available for others