Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 16, Problem 2P
To determine
The differences among private goods, natural monopolies, open-access goods, and public goods with examples.
Concept Introduction:
Goods are categorized in many different ways. There are four types of goods which are distinguished based on rivalrousness and excludability. They are private goods, natural monopolies, open-access goods, and public goods.
Rivalrousness refers to the situation where individuals can consume goods without affecting the availability of goods to other individuals.
Excludability refers to the situation where people can be prevented from consuming the goods.
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What are the two characteristics of a public good? (Choose two)
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External Cost
B.
Non-excludable
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External Benefit
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Non-rivalous
1. What kind of good is it?
Determine whether each of the following goods is a private good, a public good, a common resource, or a club good.
Private Good
Public Good
Club Good
Common Resource
A new drone that you take turns flying with your friends
A large, beautiful fountain in a town square
A dock on a lake that is open to the public
2. What kind of good is it?
Determine whether each of the following goods is a private good, a public good, a common resource, or a club good.
Private Good
Public Good
Club Good
Common Resource
A large, beautiful fountain in a park
A new BMW that you use to drive your friends around town
A free-weight station in a fitness room that is open to the public
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