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What are private goods?
A good, such as an orange, that is excludable and rival
What are the two characteristics of private goods?
- Excludable good
- Rival good
What does it mean when a good is excludable?
People who are unprepared to pay can be excluded from benefitting from the good
What does it mean when a good is rival?
When one person consumes a private good, the quantity available to others diminishes.
What is a public good?
A good, such as a radio programme, that is non excludable and non rival
What are the two characteristics of public goods?
- Non excludable
- Non rival
What does it mean when a good is non excludable?
By consuming the good, someone else is not prevented by consuming the good as well
What does it mean when a good is non rival?
The benefit other people gets from the good does not diminish if more people consume the good
What is a quasi public good?
A good which is not fully non rival and/or where it is possible to exclude people from consuming the product
Why is technological change significant?
Technological change can be significant. For example, television broadcasting is now excludable with subscriptions available to those willing and able to pay for them.
What us the tragedy if the commons?
Refers to how individuals prioritise personal gain over the well being of society
