The Different Kinds of goods When thinking about the various goods in the economy, it is useful to group them according to two characteristics: o Is the good excludable ◆ Is the good rival? H arc Inc. items and derived items c ht o 2001 by Harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. The Different Kinds of Goods When thinking about the various goods in the economy, it is useful to group them according to two characteristics: u Is the good excludable? u Is the good rival?
The Different Kinds of goods ◆ Excludability People can be prevented from enjoying the good Laws recognize and enforce private property rights. Harcourt, Inc. items and derived items copyright o 2001 by Harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. The Different Kinds of Goods uExcludability u People can be prevented from enjoying the good. u Laws recognize and enforce private property rights
The different Kinds of goods ◆ Rivalness ◆ One person’ s use of the good diminishes another person's enjoyment of it H arc Inc. items and derived items c ht o 2001 by Harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. The Different Kinds of Goods u Rivalness u One person’s use of the good diminishes another person’s enjoyment of it
Four Types of Goods ◆ Private goods ◆ Public goods ◆ Common resources ◆ Natural Monopolies H arc Inc. items and derived items c ht o 2001 by Harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Four Types of Goods uPrivate Goods uPublic Goods uCommon Resources uNatural Monopolies
Types of Goods ◆ Private goods cAre both excludable and rival ◆ Public goods Are neither excludable nor rival H arc Inc items and derived items copyright C 2001 by Harcourt, Inc
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Types of Goods uPrivate Goods uAre both excludable and rival. uPublic Goods uAre neither excludable nor rival