ECON 2010 Lecture Notes - Lecture 21: Marginal Utility, Public Good, Costco

• School: CU-Boulder
• Department: Economics
• Course: ECON 2010
• Professor: Alexander Hill

Document Summary

Ability to prevent others from consuming goods. Other consumption of a good doesn"t impact your. Most of the goods we have discussed so far. Scarcity (rival) implies economic decisions must be made. Combination of excludable and rival = market works well. Example: costco, ocean, cinema, access to copyrighted work. Non-scarcity implies no need for cost benefit analysis. Markets may not be necessary due to lack of scarcity. Markets can be useful if excludability can be worked out. Example: national defense, police or fire, climate policy, Think of these goods as having positive externalities. Can not sell these, they are non excludable and non-rival. Already pay a toll in time and effort. Suggested fixes: public transit, congestion priced toll roads. Private firms maximizing revenue/not socially beneficial. Not as clean as you think (bad) Marginal utility of wealth (restricting people coming on)