Question

3. For each of the following goods, explain whether it possesses the

nonexclusive property, the nonrival property, or both. If the good does not

have the characteristics of a public good but is, nevertheless, produced by the

government, provide an explanation for why that may be.

i.Television receivers

ii.Over-the-air television transmissions

iii.Cable television transmissions

iv.Elementary education

v.College education

vi.

Electric power

vii.Delivery of first-class mail

viii.Low-income housing

Answer 1

i. Television Receivers are exclusive property because it is possible for the owner to prevent people who have not paid for the television to prevent watching it.

ii. Over the air television transmissions are exclusive but non-rivalrous in nature. Because air-transmission of cable connection would mean that a lot of TV sets could be connected to the same antenna at the same time and none of the Television services will be affected.

iii. Cable television transmissions are rivalrous in nature because more than one TV set cannot be connected to the same television cable.

iv. Elementary education is nonexcludable and nonrivalrous in nature because no one has to pay for elementary education and neither is any particular student study experience affected if there is an addition of one more student in his class.

v. The college education is excludable because college students have to pay fees for attending college, however, it is non-rivalrous in nature for the reasons being same as those in elementary education

vi. Electric power is non-rivalrous but is excludable because a person has to pay for electricity if he wants an electricity connection in his house, however, if we assume that adequate electricity is produced for all the household, then electricity is non-rivalrous in nature. But in a country with lack of electricity production, electricity could prove to be rivalrous as the consumption of electricity by one individual will certainly affect the consumption of other.