Question

Q. 2

Explain fully if the following goods/services are excludable (or not) and rival (or not). Then categorize them accordingly.

1. Shoes

2. Main Street in Bethlehem

3. Maine lobster

Answer 1

There are two attributes of good , excludabilty and rivalrous . Excludability refers to whether people can be prevented from using the good . Eg eating a sandwich. Rivalrous mean whether one person's use of a good prevents other people from using it.Eg buying a cinema ticket.

1)Shoes are put up for sale in a store and the seller may prevent a person from taking the shoe unless paid and so it is excludable.Shoes are rivalrous as only one person can wear a pair of shoes at a time.

2)Main street in Bethlehem is not excludable as all can walk on the street and take the benefit and no one can be prevented from using the street.. It is not rivalrous as everybody can use it and one person is no 'using it up'

3).Common resources like fisheries are non excludable but rivalrous .People cannot be prevented from using the resources but the use of the resource may disturb the benefits which other people may get.So maine lobster is not excludable but rivalrous.