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Public Goods and Common Resources

20. Public Goods and Common Resources. Rival in consumption. Nonrival in consumption. Private goods. Artificially scarce goods. Excludable. Common resources. Public goods. Non-excludable. Nonexcludable Goods.

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Public Goods and Common Resources

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  1. 20 Public Goods and Common Resources Rival in consumption Nonrival in consumption Private goods Artificially scarce goods Excludable Common resources Public goods Non-excludable

  2. Nonexcludable Goods Supplier cannot prevent consumption by people who don’t pay for it. • airport security • fireworks shows Tickets $10 The market tends to underproduce nonexcludable goods.

  3. Free-Rider Problem What a dump! I hope someone picks up this stuff.

  4. 40 35 30 25 20 15 Price ($) 10 5 200 400 600 800 1000 Output Nonrival in Consumption More than one person can consume the same unit of the good at the same time. Demand • perfect competition would drive the price to zero MC

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