Answer to Question #123307 in Microeconomics for Bruce

Question

Distinguish among public goods, private goods, common resources, natural monopoly goods and mixed goods.

Answer 1

A private good is both rival and excludable this means that consumption is rival and consumers can be excluded. For instance a can of pineapples is a private good while a public good is non rival and non-excludable it benefits everyone including children and adults. It cannot be excluded from consumers.

Consumer resources is rival and non excludable. A unit of common resource can be used only once but can prevent the usage of what is locally available. For instance Ocean fish is a common resource this is because a fish taken for one person is not available for anyone else this means that it is rival. It is also non excludable because people cannot be prevented from catching them.

A natural monopoly is non rival but excludable. This is because buyers can be excluded if only they don’t but the good is non rival and marginal cost is zero. The entire cost of producing such goods is high therefore economies of scale exists over the entire range of output for which it is demanded.

Mixed goods are made up of both private and public goods. These goods and services are common in the real world and raise several vital questions about the economic role of government