CHAPTER 16 PUBLIC GOODS ANDTAX POLICY
CHAPTER 16 Public Goods and Tax Policy
Goods Classifications ■ Excludab|e can prevent people from consuming without paying Rival in consumption can not be consumed by more than one person at the same time
Goods Classifications: ◼ Excludable – can prevent people from consuming without paying ◼ Rival in consumption – can not be consumed by more than one person at the same time
Four types of goods a Private goods excludable and rival in consumption a Collective goods(Artificially scarce goods excludable and non -rival in consumption Commons goods(common resources non-eXcludable and rival in consumption a Public goods non-excludable and non- rival in consumption
Four types of goods ◼ Private goods: – excludable and rival in consumption ◼ Collective goods (Artificially scarce goods): – excludable and non-rival in consumption ◼ Commons goods (common resources): – non-excludable and rival in consumption ◼ Public goods: – non-excludable and non-rival in consumption
Four types of goods Rival in consumption Nonrival in consumption Private goods Artificially scarce goods Excludable. Wheat Pay-per-view movies Bathroom fixtures Computer software Common resources Public goods No n- Clean water Public sanitation excludable Biodiversity National defense
Four types of goods
Goods Classification Rival Non-rival Excludable Private good Collective good (wheat) (pay-per-view TV) Non-excludable Commons good Public good (fish in the ocean)(national defense From Table 16.1, p 365
Private good (wheat) Collective good (pay-per-view TV) Commons good (fish in the ocean) Public good (national defense) Rival Non-rival Non-excludable Excludable From Table 16.1, P.365 Goods Classification