1. Public Goods and Common Resources Economics for Business II Day 10 Spring 2013

2. April 23 20132 Public (Government) Action? Question: When should the government act on behalf of society, even if it means interfering with private enterprise?

3. April 23 20133 Non-excludability the goods cannot be confined to those who have paid for it

4. April 23 20134 Non-rivalry in consumption the consumption of one individual does not reduce the availability of goods to others

5. April 23 20135 Is the SUN a rival good?

6. April 23 20136 Spot the free rider

7. April 23 20137 Public Goods - Benefits

8. April 23 20138 World's Largest Solar Street Lighting Project by PTLSOLAR.

9. April 23 20139 Lighting

10. April 23 201310 Flood barriers on the Thames River.

11. April 23 201311 Flood barriers on the Thames River.

12. April 23 201312 The flood control system built on the Thames to control higher than normal

13. April 23 201313

14. April 23 201314 Eastern Scheldt Storm Surge Barrier in the Netherlands

15. April 23 201315 Property Rights The importance of Property Rights –the market fails to allocate resources efficiently because of the not well-established property rights –when markets fail due to the absence of property rights, the government can step in and solve the problem by using regulation or taxing.

16. April 23 201316 Summary Public goods refer to the goods that are not excludable or rival in consumption Common resources are not excludable but rival in consumption A common resources create new problem: how much is it going to be used? (Tragedy of the Commons) When markets fail due to the absence of property rights, the government can step in and solve the problem by using regulation or taxing