Question

4) Suppose Bryan Adams wants to perform a concert in the City Park in Corner Brook Newfoundland. The city officials argue that the only way the concert can be given permission to be performed in the City Park is if it is free of charge. If Bryan Adams agrees to performing free of charge, then the concert is A) excludable. B) nonexcludable. C) a private good. D) rival and nonexcludable. E) rival.

Answer 1

Excludability and rivalrous properties of a good determines the category to which it belong.

It is important to consider the following table. If no two people can consume the same unit of a good, then it is regarded as a rivalrous good. If people can be prevented from obtaining a good, then the good is regarded as an excluded good. Excludability requires the owner of the good to exercise effective property rights over the good (or service) in order to determine who uses it (typically only those who agrees to pay for it.) If Bryan Adams perform a concert in the City Park in corner Brook New found land, free of cost (i.e. no fees can be charged from the audience), then the concert is: non excludable (i.e. option B.) [Note: Since, the City Park is limited in space and Bryan Adams is quite famous, the concert, after a particular point may become rival and non-excludable (D.)