Public Goods in Microeconomics

These flashcards cover key vocabulary and concepts related to public goods, market dynamics, and economic theory as discussed in the principles of microeconomics.

Public Good

A good that is not excludable and not rival in consumption.

Private Good

A good that is both excludable and rival in consumption.

Excludability

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

Rival in Consumption

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

Common Resource

A resource that is rival in consumption but not excludable.

Club Good

A good that is excludable but not rival in consumption.

Free Rider Problem

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

Cost-Benefit Analysis

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

Tragedy of the Commons

A parable illustrating why common resources are overused and lead to negative externalities.

Market Failure

When the free market does not allocate resources efficiently, leading to a loss of total surplus.