Ch6 Classification of G&S

Front

What is a free good?

Back

A free good is not scarce and has zero opportunity cost.

Front

What is a private good?

Back

A private good is one that is consumed by one person and not available to anyone else.

Front

What is a public good?

Back

A public good is non-excludable as it is not possible to stop anyone from using it, and non-rival since consumption by one person does not reduce consumption by anyone else.

Front

What is a quasi-public good?

Back

A quasi-public good has some but not all of the characteristics of a public good.

Front

Who is a free rider?

Back

A free rider is someone who enjoys the use of a public good without having to pay for it.

Front

Give examples of a public good.

Back

Examples include a flood control system and street lighting, both of which are non-excludable and non-rival.

Front

What is information failure?

Back

Information failure occurs when consumers do not have complete information available when making decisions, preventing them from making rational decisions.

Front

What is a merit good?

Back

A merit good is thought to be desirable for consumers, but is underprovided by the market because of information failure.

Front

Give examples of a merit good.

Back

Examples include an inoculation against polio and university education, both of which may not be fully appreciated by consumers.

Front

What is a demerit good?

Back

A demerit good is thought to be undesirable for consumers and is overprovided by the market because of information failure.