4Public GoodIn graph, private market would not produce Q=1 because no individual consumer would pay MSC. Once firm has produced product, it can’t exclude others who might enjoy itConsumers could cooperatively purchase Q=1, but there is the free rider problem
5Tragedy of the Commons Fishing experiment Rival, but not excludable Property Rights as solutionSocial norms as alternative to property rights
6Drawbacks of private property rights High costs of defining or enforcing property rightsDifficulty of charging for useHigh transactions costsFairness
7Four Categories of Goods Private GoodsRival and excludablePublic GoodsNonrival and nonexcludableCommon ResourcesNonexcludable, but rivalNatural MonopoliesExcludable but nonrival
8Discussion Classify the following Police protectionEducationThe InternetGloballyWeb access at the CollegesWhy does government provide items that are not public goods?