Public Goods and Common Resources

Flashcards covering key terms and concepts related to public goods and common resources, including definitions and examples for clarity.

Excludability

The property of a good whereby a person can be prevented from using it.

Rivalry in Consumption

The property of a good whereby one person's use diminishes other people's use.

Private Goods

Goods that are both excludable and rival in consumption.

Public Goods

Goods that are neither excludable nor rival in consumption.

Common Resources

Goods that are rival in consumption but not excludable.

Club Goods

Goods that are excludable but not rival in consumption.

Free Rider

A person who receives the benefit of a good but avoids paying for it.

Tragedy of the Commons

A parable that illustrates why common resources are used more than is desirable from the standpoint of society as a whole.

Cost-Benefit Analysis

A study that compares the costs and benefits to society of providing a public good.

Positive Externality

A beneficial effect experienced by people who do not pay for a good or service.

Negative Externality

A harmful effect experienced by people who do not pay for a good or service.