G A in Document Q- Search in Document Home InsertDesignLayoutReferences Mailings
ID: 1103112 • Letter: G
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G A in Document Q- Search in Document Home InsertDesignLayoutReferences Mailings Review View B+ Share a . Times [ 15 ] An A- A EIE e . . 4 B1 y , stone X, xA , & , A = = = = : -- AaBbccDGEe | moderate AaBbccDe AaBbccdote AaBbc , lo AaBbcCD EABODEEAaBBCcDoEe No spacing Heading 1 Hosting a title subtitle sister Eph Emphasis Style Paste Question / Public Goods and Common Resource Refer to the scenario below and answer questions Consider the following goods : i, afish teriyaki served at arestaurant iiiii. Fish in the ocean iiiiii. Platinum Arowana (an exotic fish)in a huge aquarium in aprivately-owned building i. Which of these goods is the best example of a private good? Briefly explain. ii. Which of these goods is the best example of a club good? Briefly explain. iii. Which of these goods is the best example of a common resource? Briefly explain. iv. Do any of these goods: cause an externality? If so, which good(s)? Do those good(s) result in a positive or negative externality? Briefly explain. Page 1 of 1 121 words OT English (US) Focus + 137%Explanation / Answer
i) Private good has the characteristics of excludability and rivalness. The third case is a private good as the fish being exclusive, it being kept at a privately owned building reduces its availability to others so it is rival in consumption. It is kept at a private building and not available to others thus it is excludable.
ii) A club good has the characteristic of being excludable and non rival. A fush teriyaki served ata restaurant is aub good as it is excludable since a person needs to pay a price for consuming the good or else it is not available to him. However consumption by one individual doesn’t reduce the amount available to others. So it is non rival.
iii) A common resource has the characteristic of being rival in consumption and non excludable. It implies that it is not possible to exclude others from using the resource but the consumption by one individual reduces the amount available to others. A fish in the ocean is an example of club good. Anyone at ocean can catch the fish but the fish being caught by one person reduces its availability to others.
iv) Externalities refers to a situation in which one person’s action affects others who neither receive compensation for harm done nor pay for benefit gained. Externalities is possible in case of club goods and common property resource, that is, a fish teriyaki in a restaurant and a fish in ocean. They cause negative externality, that is affecting other individuals negatively. A common property resource may be overused that would inflict harm on others. This is referred to as tragedy of commons.
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