ECN 203 Lecture Notes - Lecture 12: Taco
Document Summary
We consume many goods without paying: parks, national defense and clean air. When goods have no prices, the market forces that normally allocate resources are absent. The private market may fail to provide the socially efficient quantity of such goods. A good is excludable if a person can be prevented from using it. You cannot consume the good unless you pay for it. Not excludable: am/fm radio signals, national defense. A good is rival in consumption if it can only be consumed by one person, or be one person at a time. If you consume it, it is less available for other consumers. If a good is rival, then one person"s use of it diminishes others" use.
