Question

1. National Public Radio would be considered a club good. T/F

2. A pair of jeans is rival but non-excludable. T/F

3. A good that is rival in consumption is one that someone can be prevented from using if she did not pay for it. T/F

4. Roads can be considered either public goods or common resources, depending on how congested they are. T/F

5. All goods that are excludable are also rival in consumption, but not all goods that are rival in consumption are excludable. T/F

6. A free rider is a person who pays for a good but does not receive the benefit of it. T/F

7. An example of the “Tragedy of the Commons” is litter in the picnic area of a local park. T/F

8. Private markets usually provide lighthouses because ship captains have the incentive to navigate using the lighthouse and therefore will pay for the service.T/F

9. One possible solution to the problem of protecting a common resource is to convert that resource to a private good. T/F

10. Depending on congestion, national parks can be either a common resource or a public good. T/F

Answer 1

1) False, national public radio would be a public good since no one can exclude another person from listening to it and it's non rival in nature.

2) False , a pair of jeans is both excludable and rival because price can be paid to exclude it and it being worn by one , would make it unavailable for others.

3) False, if someone is not provided a good because it's not paid for , it is excludable good and not rival good.

4)True, roads can be both the type of goods because when there is congestion, another vehicle is a rival (taking up space), but without it, roads are public goods.

5) False, a good can be rival and excludable or non rival and non excludable or rival and non -excludable or non-rival or excludable. Not all goods that are excludable are rival in nature. TV cable is excludable but not a rival good.

6)False, a free rider is one who doesn't pay for the good and enjoys the good

7)True, when the resources are freely available as public good , they are overused and hence wasted or not taken care of . This leads to tragedy of commons.

8) False, lighthouses are not private goods. These are public goods and all the ships are warned by them the same way.

9) True, one possible solution to protect the common resource is to convert it to private good. This is because when converted, there would be restrictions on usage by owner and hence wont be overused.

10)True, depending on congestion national parks can be common resources or publc good. If there are more people ,there would be rivalry, but if there is not a huge crowd, it is a public good.