Market failure due to lack of public goods

What is excludability in economic terms?

The ability to prevent people from using a good or service.

Give an example of an excludable good.

Paid streaming services.

Define non-excludable goods.

Goods that are available to everyone and no one can be prevented from using them.

Provide an example of a non-excludable good.

Public parks.

What does rivalry or subtractability refer to?

A characteristic where one person's use reduces the available amount for others.

Name an example of a rivalrous good.

Food.

What characterizes non-rival goods?

They can be used by multiple people without depletion.

What type of goods are apples categorized as?

Private goods.

Identify an example of common pool resources.

Fish in the ocean.

What happens when a service reaches capacity?

The marginal cost of providing that service can increase due to congestion.

What is the value of a good that exhibits a network effect?

It increases as more people adopt it.

Explain property rights.

Legal rights to own, use, and transfer resources, goods, or property.

List the four main types of property rights.

Private Property, Public Property, Common Property, Intellectual Property.

What are the characteristics of common pool resources?

Non-excludable and rivalrous.

Describe the free rider problem.

A situation where individuals benefit from a good without paying for it.

What are the two main features of public goods?

Non-excludability and Non-rivalry.

What is a consequence of the free rider problem?

Market failure, leading to goods or services not being provided.

Define quasi public goods.

Goods that have some but not all characteristics of public goods.

Give an example of a quasi public good.

Common pool resources like fisheries.

What are club goods?

Goods that are excludable but non-rivalrous.

How can club goods become partially rivalrous?

Due to congestion or limited resources.