1. A. The two characteristics of public goods are non-rivalness in consumption a
ID: 1195954 • Letter: 1
Question
1.
A.
The two characteristics of public goods are non-rivalness in consumption and non-exclusion. To what extent do these characteristics apply to the following goods and services?
I. A milk shake.
II. A lighthouse.
III. The Massachusetts turnpike at 2 a.m...
IV. Boston Common on First Night. [On the night of December 31 over a million people crowd into Boston, to participate in scores of almost-free events, a parade, to enjoy the ice sculptures on the Common, etc. Parts of the Common get very crowded.]
B.
The Commons List four examples of common property that has been overused (because it proved impossible or difficult to exclude anyone from using the resource). At least two of your examples must be global.
Explanation / Answer
A.
I. None of the two characteristics apply to milkshake. One person's use of milkshake prevents others from consuming it. Moreover, those who dont pay of milkshake can be excluded from the consumption of milkshake.
II. Both of the two characteristics apply to light house. One person's use of this good does not prevent others from using the same lighhouse too. Moreover, no one can be excluded from using this good.
III. A turnpike road has the characteristic of non-rivalness in consumption, but it does not have the characteristic of non-exclusion, because those who do not pay the toll can be excluded from using the turnpike road.
IV. The First Night's events such as a parade have the property of non-rivalness but does not have the property of non-exclusion, since the organisers can get permission from the municipality to levy a fees on the people who want to enter the park.
B. The first two examples below are global common property resources.
I. Air
II. Ocean
III. Public roads
IV. Fish in a public lake.
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