4 Public 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
5 Tragedy of the Commons Fishing experiment Rival, but not excludable Property Rights as solutionSocial norms as alternative to property rights
6 Drawbacks of private property rights High costs of defining or enforcing property rightsDifficulty of charging for useHigh transactions costsFairness
7 Four Categories of Goods Private GoodsRival and excludablePublic GoodsNonrival and nonexcludableCommon ResourcesNonexcludable, but rivalNatural MonopoliesExcludable but nonrival
8 Discussion Classify the following Police protectionEducationThe InternetGloballyWeb access at the CollegesWhy does government provide items that are not public goods?