Chapter 76, Problem 1CYU

a)

To determine

Whether a public space such as a park indicates excludable, or rival in consumption, and what kind of good it is.

Answer to Problem 1CYU

Park is non-excludable and may or may not be rival in consumption.

Explanation of Solution

Public space is generally considered non-excludable, but according to the level of congestion, it can rival in consumption because if one or two persons use the park’s path for jogging then it will not prevent the use of another person and the path can become the rival in consumption.

In this case, the public space such as a park is a public good because it is for the whole society or open to the public but the space of the park is rival in consumption if there are many

people trying to use the park’s particular space at the same time. Therefore, this public space would become a common resource.

Economics Concept Introduction

Introduction: Excludable refers to the situation when according to people's willingness to pay, producers can prevent certain people from using or consuming goods and services. And, the rival in consumption means if one person consumes a good or service, then it reduces the number of available goods and services for consumption by another.

A public good covers both non-excludable as well as non-rival.

b)

To determine

Whether a cheese burrito indicates excludable, or rival in consumption, and what kind of good it is.

Answer to Problem 1CYU

Cheese burrito indicates excludable as well as rival in consumption in this case.

Explanation of Solution

A cheese burrito is both excludable and rival in consumption which means it is a private good because when one person consumes a cheese burrito then it prevents another person from consuming the unit of cheese burrito.

Economics Concept Introduction

Introduction: Excludable refers to the situation when according to people's willingness to pay, producers can prevent certain people from using or consuming goods and services. And, a rival in consumption means if one person consumes a good or service then it reduces the number of available goods and services for consumption by another.

A public good covers both non-excludable as well as non-rival. And, a private good is excludable and rival in consumption which may prevent people from consuming when one person consumes the same good.

c)

To determine

Whether information from a website that is password-protected indicates excludable, or rival in consumption, and what kind of good it is.

Answer to Problem 1CYU

Information from a website that is password-protected indicates excludable but non-rival in consumption.

Explanation of Solution

Information from a website that is password-protected indicates excludable but non-rival in consumption which means it is an artificially scarce good because its effective price would be zero but sellers can charge a price that reduces its consumption or usage. In this case, consumers may use the website by paying a certain amount to unlock the password the website.

Economics Concept Introduction

Introduction: Excludable refers to the situation when according to people's willingness to pay, producers can prevent certain people from using or consuming goods and services. And, the rival in consumption means if one person consumes a good or service then it reduces the number of available goods and services for consumption by another.

Public goods covers are both non-excludable as well as non-rival. And, a private good is excludable and rival in consumption which may prevent people from consuming when one person consumes the same good.

d)

To determine

Whether publicly announced information about the path of an incoming hurricane indicates excludable, or rival in consumption, and what kind of good it is.

Answer to Problem 1CYU

Publicly announced information about the path of an incoming hurricane indicates non-excludable as well as non-rival in this case.

Explanation of Solution

Publicly announced information about the path of an incoming hurricane indicates non-excludable as well as non-rival in consumption which means it is a public good because the information which is publicly announced to make people alert for a hurricane is for the whole public. Therefore, it is a public good.

Economics Concept Introduction

Introduction: Excludable refers to the situation when according to people's willingness to pay, producers can prevent certain people from using or consuming goods and services. And, the rival in consumption means if one person consumes a good or service, then it reduces the number of available goods and services for consumption by another.

A public good covers both non-excludable as well as non-rival. And, a private good is excludable and rival in consumption which may prevent people from consuming when one person consumes the same good.