Exercise 12.7 Rivalry and excludability For each of the following goods or bads, decide whether they...

Exercise 12.7 Rivalry and excludability

For each of the following goods or bads, decide whether they are rival and whether they are excludable, and explain your answer. If you think the answer depends on factors not specified here, explain how.

A free public lecture held at a university lecture theatre

Noise produced by aircraft around an international airport

A public park

A forest used by local people to collect firewood

Seats in a theatre to watch a musical

Bicycles available to the public to hire to travel around a city

Solutions

Expert Solution

A good is RIVALROUS if only one person can consume it and also, prevent others from consuming it. A good is EXCLUDABLE if one can prevent other's from using it

1) A free public lecture held at a university lecture theatre - neither RIVALROUS nor EXCLUDABLE as, it is held for public and it is free, no one can be excluded or use it privately.

Noise produced by aircraft around an international airport - as the noise is produced in the atmosphere which is transferable through air, no can can stop others from listening it hence, it is neither RIVALROUS nor EXCLUDABLE .

3) a public park - it is a public good and is meant to be used by everyone hence, it is neither RIVALROUS nor EXCLUDABLE.

4)A forest used by local people to collect firewood - forest is a natural entity, it is not meant to be used by any single person or community, it is public good. Hence, it is neither RIVALROUS nor EXCLUDABLE.

5)Seats in a theatre to watch a musical- seats in a theatre could be purchased by anyone hence, it is not for any individual. But one has to purchase seat and can exclude others from using his/her seat. Hence, it is not RIVALROUS but it is EXCLUDABLE.

6)Bicycles available to the public to hire to travel around a city - as it is for public is it not RIVALROUS but as one has to hire it, it is EXCLUDABLE .Hence, it is not RIVALROUS but it is EXCLUDABLE.

Rahul Sunny answered 1 year ago

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