Key Terms and Concepts on Public Goods and Innovation

This set of flashcards covers key terms and concepts related to public goods, innovation, and the economic implications of intellectual property.

Free Rider

Those who want others to pay for a public good and then plan to use the good themselves.

Intellectual Property

The body of law including patents, trademarks, copyrights, and trade secret law that protect the right of inventors to produce and sell their inventions.

Nonexcludable

When it is costly or impossible to exclude someone from using the good, making it difficult to charge for it.

Nonrivalrous

When one person's use of the good does not prevent others from using it.

Positive Externalities

Beneficial spillovers to a third party or parties from an economic activity.

Private Benefits

The dollar value of all benefits of a new product that can be captured by the investing company.

Private Rates of Return

When estimated rates of return go primarily to an individual, such as earning interest on a savings account.

Public Good

A good that is nonexcludable and nonrivalrous, making it difficult for market producers to sell to individual consumers.

Social Benefits

The dollar value of all benefits of a new product that can be captured by society as a whole.

Social Rate of Return

When estimated rates of return go primarily to society, such as providing free education.