Public And Private Goods, Natural Resources and Monopolies
Rival
multiple consumers cannot consume the same good
Non-Rival
multiple consumers can consume the same good
Excludable
consumption can be detected and prevented by producer

Private Goods

Efficiently produced and allocated by markets

  • agriculture, minerals, artifacts
  • labor, services
  • land parcels
  • rain and sunlight incident on land parcels

Natural Monopoly

High fixed costs, low marginal costs => inefficient competition

  • (uncongested) highways and bridges
  • water and sewage lines
  • wired telecom networks (not content)
  • power distribution (not generation)
  • aggression deterrance (police/courts); fire protection service
Non-Excludable
consumption cannot be detected or prevented

Natural Resources

Tragedy of the commons, negative externalities => overconsumption

  • atmosphere, bodies and streams of water, pollution sinks
  • sunlight, wind, fish, game
  • unowned land and space; orbits
  • electromagnetic spectrum; some namespaces

Public Goods

Free riders, positive externalities => underproduction

  • national defense
  • (uncongested) local streets
  • scientific knowledge
  • prevention of contagion, conflagration, flood
  • anti-poverty safety net (assuming most people favor charity)
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