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Two Characteristics of Goods: Example of Public Goods: Example of Common Resources

This document discusses the characteristics and categories of goods. It defines excludability and rivalry in consumption as the two key characteristics of goods. The four categories of goods are private goods, public goods, common resources, and club goods. It provides examples of public goods and common resources and defines a free rider and cost-benefit analysis.

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LenielynBiso
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58 views1 page

Two Characteristics of Goods: Example of Public Goods: Example of Common Resources

This document discusses the characteristics and categories of goods. It defines excludability and rivalry in consumption as the two key characteristics of goods. The four categories of goods are private goods, public goods, common resources, and club goods. It provides examples of public goods and common resources and defines a free rider and cost-benefit analysis.

Uploaded by

LenielynBiso
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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TWO CHARACTERISTICS OF GOODS

1. EXCLUDABILITY- the property of a good whereby a person can be prevented from


using it.
2. RIVALRY IN CONSUMPTION- the property of the good whereby one person’s use
diminishes other people’s use.

CATEGORIES OF GOODS

1. PRIVATE GOODS - both excludable and rival in consumption


2. PUBLIC GOODS – neither excludable nor rival in consumption
3. COMMON RESOURCES – rival in consumption but not excludable
4. CLUB GOODS – excludable but not rival in consumption

FREE RIDER - a person who receives the benefit of a good but avoids paying for it.

EXAMPLE OF PUBLIC GOODS: EXAMPLE OF COMMON RESOURCES:


●National Defense ● Clean Air and Water
●Basic Research ●Congested Roads
●Fighting Poverty ●Fish, Whales and other Wildlife

COST-BENEFIT ANALYSIS – a study that compares the cost and benefits to society of
providing a public goods.

REPORTED BY:
GRACE ARCIGA CARILLO-SOMERA

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