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101 lecture 11
- 1. Microeconomics Lecture 11 ! Public Goods and Common Resources
- 2. Key Terms
- 3. Key Terms excludability rivalry in consumption private goods public goods common resources club goods free rider cost-benefit analysis Tragedy of the Commons
- 4. Four Types of Goods
- 5. Four Types of Goods Private Goods Public Goods Common Resources Club Goods
- 6. Some goods do not have prices
- 7. Some goods do not have prices How much should we produce? ! Government policy
- 9. Private Goods Goods that are excludable and rival in consumption. ! Can exclude others If I consume, you cannot
- 10. Excludable
- 11. Excludable Can people be prevented from using the good? ! Yes No
- 13. Rivalry in Consumption Can one person’s use of a good reduce others use? ! Can two people consume at the same time without reducing?
- 15. Exclude others ! When I consume it diminishes
- 16. Public Goods
- 17. Public Goods Goods that are neither excludable nor rival in consumption. ! Cannot exclude Everyone can consume without reducing amount
- 19. Free Rider
- 20. Free Rider a person who receives a benefit but does not pay for it
- 21. National Defense
- 22. Basic Research ! Everybody Benefits
- 23. Common Resources
- 24. Common Resources Goods that rival in consumption but are not excludable ! Cannot exclude others If I consume, you cannot
- 26. Common Resource ! Drink as fast as possible before it runs out
- 28. Private Good
- 29. Private Good Each person has his own cup
- 30. Which method will incentivize people to not waste the resource? Share one cup Each person gets their own cup
- 37. Tragedy of the Commons
- 38. Tragedy of the Commons If everyone owns it, no one owns it
- 39. Tragedy of the Commons If everyone owns it, no one owns it Privatize the commons
- 44. Property Rights
- 45. Property Rights Reduce contention ! Create wealth
- 46. Club Goods
- 47. Club Goods Goods that are excludable but not rival in consumption ! Can exclude others Everyone can consume without reducing amount
- 50. Excludable?
- 51. Excludable? Can people be prevented from consuming?
- 52. Yes Excludable? Can people be prevented from consuming?
- 53. Yes Excludable? Can people be prevented from consuming? No
- 54. Rival in Consumption? Yes Excludable? Can people be prevented from consuming? No
- 55. Rival in Consumption? Yes Excludable? No Is it reduced when one person consumes? Can people be prevented from consuming?
- 56. Rival in Consumption? Yes Yes Excludable? No Is it reduced when one person consumes? Can people be prevented from consuming?
- 57. Rival in Consumption? Yes No Yes Excludable? No Is it reduced when one person consumes? Can people be prevented from consuming?
- 58. Rival in Consumption? Is it reduced when one person consumes? Yes No Yes Excludable? No Private Goods Can people be prevented from consuming?
- 59. Rival in Consumption? Is it reduced when one person consumes? Yes No Yes Excludable? No Private Goods Snickers Bar Can people be prevented from consuming?
- 60. Rival in Consumption? Is it reduced when one person consumes? Yes No Yes Excludable? No Private Goods Snickers Bar Car Can people be prevented from consuming?
- 61. Rival in Consumption? Is it reduced when one person consumes? Yes No Yes Excludable? No Private Goods Snickers Bar Car Pizza Can people be prevented from consuming?
- 62. Rival in Consumption? Is it reduced when one person consumes? Yes No Yes Excludable? No Private Goods Snickers Bar Car Pizza Can people be prevented from consuming?
- 63. Rival in Consumption? Is it reduced when one person consumes? Yes No Yes Excludable? No Private Goods Snickers Bar Car Pizza Common Resources Can people be prevented from consuming?
- 64. Rival in Consumption? Is it reduced when one person consumes? Yes No Yes Excludable? No Private Goods Snickers Bar Car Pizza Common Resources Fish in Ocean Can people be prevented from consuming?
- 65. Rival in Consumption? Is it reduced when one person consumes? Yes No Yes Excludable? No Private Goods Snickers Bar Car Pizza Common Resources Fish in Ocean Air Can people be prevented from consuming?
- 66. Rival in Consumption? Is it reduced when one person consumes? Yes No Yes Excludable? No Private Goods Common Resources Public Goods Snickers Bar Car Pizza Fish in Ocean Air Can people be prevented from consuming?
- 67. Rival in Consumption? Is it reduced when one person consumes? Yes No Yes Excludable? No Private Goods Common Resources Public Goods Snickers Bar Car Pizza Fireworks Fish in Ocean National Defense Air Can people be prevented from consuming?
- 68. Rival in Consumption? Is it reduced when one person consumes? Yes No Yes Excludable? No Private Goods Common Resources Club Goods Public Goods Snickers Bar Car Pizza Fireworks Fish in Ocean National Defense Air Can people be prevented from consuming?
- 69. Rival in Consumption? Is it reduced when one person consumes? Yes No Yes Excludable? No Private Goods Common Resources Club Goods Public Goods Snickers Bar Car Pizza Satellite TV Fireworks Fish in Ocean National Defense Air Can people be prevented from consuming?
- 70. Rival in Consumption? Is it reduced when one person consumes? Yes No Yes Excludable? No Private Goods Common Resources Club Goods Public Goods Snickers Bar Car Pizza Satellite TV Paintings Fireworks Fish in Ocean National Defense Air Can people be prevented from consuming?