Public Goods And Common Resources

Explanation
Excludibility refers to the property of a good where a person can be prevented from using it if they don't pay for it. In other words, excludability allows for the exclusion or restriction of individuals from accessing or using a good or service if they have not paid for it. This is often seen in the case of private goods, where the owner or provider has the ability to control access to the good and can deny its use to those who have not paid for it.

Explanation
Rivalry refers to the property of a good where one person's use diminishes other people's use. In other words, when one person consumes or uses a good, it reduces the availability or benefit of that good for others. This creates competition or rivalry among individuals for the use or consumption of the good.

Explanation
A public good is considered neither excludable nor rival. This means that it is not possible to exclude individuals from consuming the good, and one person's consumption of the good does not diminish its availability for others. Public goods are typically provided by the government or other public entities as they are difficult for private markets to efficiently provide due to the free-rider problem. Examples of public goods include national defense, street lighting, and clean air.

Explanation
A common resource that is "rival but not excludable" means that multiple individuals can use and benefit from the resource simultaneously, but it is difficult or impossible to prevent others from accessing or using it. This suggests that the resource is limited in quantity and can be depleted or degraded through use, but it is difficult to control or restrict access to it. An example of such a resource could be a public park, where multiple people can enjoy the space at the same time but it is challenging to exclude others from entering or using it.

Explanation
A cost-benefit analysis is a study that compares the costs and benefits of providing public goods to society. This analysis involves weighing the potential costs of implementing a public good against the potential benefits it may bring to society. It helps decision-makers determine whether the benefits of providing a public good outweigh the costs and if it is worth pursuing. This type of study is often used in policy-making and resource allocation to make informed decisions about the allocation of resources and public investments.

Explanation
The government provides public goods because the private market will not produce an efficient quantity. Public goods are non-excludable and non-rivalrous, meaning that once they are provided, everyone can benefit from them and one person's use does not diminish its availability to others. In a private market, producers are motivated by profit and may not have an incentive to provide public goods as they cannot exclude non-payers and may not be able to recoup their costs. Therefore, the government steps in to ensure the provision of public goods for the benefit of society as a whole.

Explanation
The term "Tragedy of the Commons" refers to a situation where individuals, acting independently and rationally, deplete a shared resource for their own benefit, leading to the resource's degradation or depletion. This parable highlights the tendency for common resources to be overused because individuals are motivated by self-interest rather than considering the long-term well-being of the community. The concept emphasizes the need for collective action and regulation to prevent the tragedy of overuse and ensure sustainable use of common resources.

Explanation
A free rider is a term used to describe a person who takes advantage of a good or service without contributing to its cost. In other words, they receive the benefits of the good without paying for it. This concept is often seen in situations where public goods or services are provided, such as public transportation or national defense. Free riders can be seen as benefiting from the contributions of others without making their own fair share of contributions. Therefore, the statement that a free rider is a person who receives the benefit of a good but avoids paying for it is true.