Subpart (a):
Classifying goods
Subpart (a):
Explanation of Solution
Apples, open-heart surgery, cable TV, farm-raised salmon and the Yosemite National Park can be classified as excludable goods. On the other hand, Central Park, Chinese language, idea of calculus are considered as non-excludable.
Concept Introduction:
Non-excludable good: A good is non-excludable if people who do not pay cannot be easily prevented from using the good.
Non-rival good: A good is non-rival if one person’s use of the good does not reduce the ability of the other person to use the same good.
Public good: A public good is non-excludable and non-rival in nature.
Private good: A private good is excludable and rival in nature.
Club good: A club good is excludable but non-rival in nature.
Common Resource: A common resource is a good which is non-excludable but rival in nature.
Subpart (b):
Classifying goods
Subpart (b):
Explanation of Solution
Apples, open-heart surgery and farm-raised salmon can be classified as rivals. On the other hand, cable TV, Central Park, Chinese language, idea of calculus and the Yosemite National Park are considered as non-rival.
Concept Introduction:
Non-excludable good: A good is non-excludable if people who do not pay cannot be easily prevented from using the good.
Non-rival good: A good is non-rival if one person’s use of the good does not reduce the ability of the other person to use the same good.
Public good: A public good is non-excludable and non-rival in nature.
Private good: A private good is excludable and rival in nature.
Club good: A club good is excludable but non-rival in nature.
Common Resource: A common resource is a good which is non-excludable but rival in nature.
Subpart (c):
Classifying goods
Subpart (c):
Explanation of Solution
Since apples, open-heart surgery and farm-raised salmon are excludable and rival; they can be classified as private goods. On the other hand, Central Park, Chinese language and idea of calculus are considered as public good as they are non-excludable and non-rival.
The Cable TV and Yosemite are non-rival private goods or club goods, as they are non-rival but excludable. However, none is a common resource other than if the Central Park gets very crowded reducing the amount of park available to others, turning it then into a common resource.
Subpart (d):
Classifying goods
Subpart (d):
Explanation of Solution
The people can be from the Yosemite National Park at the entrance. This is possible as there are gates at every entrance for cars and they can do necessitate hikers to use permits.
Concept Introduction:
Non-excludable good: A good is non-excludable if people who do not pay cannot be easily prevented from using the good.
Non-rival good: A good is non-rival if one person’s use of the good does not reduce the ability of the other person to use the same good.
Public good: A public good is non-excludable and non-rival in nature.
Private good: A private good is excludable and rival in nature.
Club good: A club good is excludable but non-rival in nature.
Common Resource: A common resource is a good which is non-excludable but rival in nature.
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Chapter 19 Solutions
EBK MODERN PRINCIPLES OF MICROECONOMICS
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