Explain which category (Public Good, Private Good, Club Good or Common Resources) each of the following goods...

Explain which category (Public Good, Private Good, Club Good or Common Resources) each of the following goods falls into and why:

police protection
snow plowing
education
rural roads
city streets

Why do you think the government provides items that are not public goods? (free-riding)

Solutions

Expert Solution

1> Police protection is non-rival and non-excludable since police protection is for all and thus no one is excluded from it. Also, it is not rival because if I enjoy protection, it will not harm another one. So, it is a public good.

2> Snow plowing is also non-rival and non-excludable since if the snow is plowed, we can not tell someone not to go to the road and not enjoy the benefit, so it is non-excludable. It is non-rival in nature because in snow-plowing, if one enjoys the benefit, one does not get harmed. So, it is also a public good.

3> Education is a club good, because it is excludable as an University selects a group of students and can exclude someone from education. But, it is non-rival because if I get educated, I do not directly negatively affect someone.

4> Rural roads are public good unlike urban roads. Obviously, it is a non-excludable good because no one can be excluded from the road. Since the rural roads are never congested, me driving on a rural road does not affect another one.

Rahul Sunny answered 1 year ago

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