Question

1) Explain what is meant by a good being "excludable."?

2) Explain what is meant by a good being "rival in consumption."?

3) Define and give an example of a public good. Is it likely that the private market provide this good on its own? Explain.

4) Define and give an example of a common resource. Without government intervention, will people use this good too much or too little? Why?

Answer 1

1)A good is called excludable good if it is possible to prevent people from getting access to it if they have not paid for it. In other words, a person who has paid for gettimg access to the good will only be able to use it.

2) A good is “rival in consumption”, if the consumption of the good by a person reduces the amount that is available for use for the other person.