Wednesday, October 21, 2015

There are many interesting ideas that are given in chapter 11.  This chapter talked a lot abut Public goods and common resources and how they should be used and dealt with.  One thing that Chapter 11 stressed is the fact that goods differ in whether they are excludable and whether they are rival in consumption.  A good is excludable if it is possible to prevent someone from using it.  This is a very interesting idea, and does happen in the real world.  There are products that are excludable because they are illegal and therefore cannot be used.  We also learned that a good is rival in consumption if one person's use of the good reduces other people's ability to use the same unit of good.  Markets work best for private goods, which can both be either excludable or rival in consumption, therefore a combination of both methods are seen as good and healthy for an economy.  Chapter 11 taught us however that public goods are neither rival in consumption or excludable.  A public good would be characterized by something that is provided to you, usually by the government.  For example, fireworks, national defense, and the creation of fundamental knowledge are all public goods.  Common resources on the other hand are rival in consumption but they are not excludable.

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