Chapter 11: Public Goods and Common Resources

The chapter talks about excludability which is the property of a good whereby a person can be prevented from using it. It also talks about rivalry in consumption which is the property of a good whereby one person's use diminishes other people's uses. It talks about the importance whether or not people can be prevented from using a good. Private goods are goods that are both excludable and rival in consumption. Most private goods are controlled by monopolies. Public goods are goods that are neither excludable nor rival in consumption. Common resources are goods that are rival in consumption but not excludable. Free riders are people who receive the benefit of a good but avoids paying for it. This chapter also talks about the cost-benefit analysis. A study that compares the costs and benefits to society of providing a public good. The tragedy of commons is a parable that illustrates why common resources get used more than is desirable from the standpoint of society as a whole.