Econ. Ch. 11 Public Goods & Common Resources

Excludable (Excludability)
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Terms in this set (10)
-Neither Excludable or Rival- People can't be prevented from using public good and one person's use doesn't diminish another person's use
-A tornado siren
-national defense (one of most expensive)
-uncongested toll road
-fireworks if displayed in town with many residents, but not a Disney world b/c visitors pay to see display
-general knowledge vs. research- research can be excludable if patented, g.k. is always a public good-a mathmatetician can't patent a theorem
-advocates of antipoverty programs claim that fighting poverty is a public good
-similar to an externality-something of value has no price attached to it
-people have incentive to be free riders (fireworks)
-a parable that illustrates why common resources are used more than is desirable from the standpoint of society as a whole
-Why tragedy of commons?- social and private incentives differ
-arises because of an externality- someone's use of something diminishes another
-govt impose fees and regulate behavior to mitigate overuse
-EX: open grazing, clean air and water, congested roads, wildlife
-environmental degradation is a modern TOC