1. Group Assignment
Due midnight on Friday 1/24 by email
Create a youtube vide on the following question:
1. Why do you think the government is the only builder
of roads, armies or street lights? And do you think it
does a good job at providing these items?
Everyone gets the same grade

2. Problems with assignment?
• Strategy?
• Incentives?

3. Brainstorm at your tables
• 3 + goods that if you consume it, your friends
can’t consume it at the same time
• 1.5 + goods that if you consume it, your friends
are unaffected by your consumption

4. Private Goods
• Rivaled consumption
• A person’s consumption
affects others’ consumption
• Excludable
• Firms can exclude people
who don’t pay

5. Public Goods
• Goods that are both non-excludable and
non-rivaled in consumption

6. Free Rider Problem
• Free Rider – a person who does not pay for,
but benefits from a public good
How does society pay
for public goods?
Taxes
User fees

7. Private Goods
For example:
food
Club goods
EX: Golf Course,
movie theatre
Common Goods
EX: Open ocean fishing
Public goods
EX: National Defense
Street lights

8. Excludable? Rivaled Consp.?

9. Excludable? Rivaled Consp.?

10. Excludable? Rivaled Consp.?

11. Excludable? Rivaled Consp.?

12. Excludable? Rivaled Consp.?

13. AP question
1. A pure public good is a good that is
a) Provided efficiently by markets
b) Rivalrous and excludable in consumption
c) Nonrivalrous and excludable in consumption
d) Nonrivalrous and nonexcludeable in
consumption
e) Rivalrous and nonexcludable in consumption

14. AP question
1. Which of the following would fit the definition of
a public good?
a) Broadcast FM Radio
b) Movie Theater tickets
c) Submarine sandwiches
d) Medical insurance
e) Cable television