Question

The concept of property rights is important to understanding the way externalities affect market efficiency. The four images above represent four different types of goods, each with unique property rights. Below, match each good with its correct category.items (4 items) (drag and drop into the appropriate area below) no more items categories private goods drag and drop here common-resource goods an alaskan king crab a snow cone club goods a community fireworks display public goods satellite television

Answer 1

Answer:

1. Private Good: A snow cone

2. Public Good: A community fireworks display

3. Common Resource: An Alaskan king crab

4. Club Good: Satellite Television

Explanation:

Goods can be categorized into four distinct categories as show above. This distinction is based mainly on two things:

A. Excludability: Whether others can be prevented from consuming them.

B. Rivalrousness: Whether consumption reduces the availability for consumption by others.

1. Private Goods: They are both excludable and rivalrous. They have to be purchased in order to be consumed. Anyone who cannot afford it, is excluded from consuming it. Similarly, the purchase of it by one person reduces the availability for another person, proving rivalry.

2. Public Goods: They are both non-excludable and non-rival. Anyone can consume it and one person’s consumption does not reduce what is available for another person.

3. Common Resource: They are non-excludable but are rival products. They are available to be utilized by anyone but one person’s consumption will reduce what is available for another person.

4. Club Goods: These are excludable but non-rival goods. Individuals can be prevented from consuming them if they don’t purchase it, but one person’s consumption won’t impact the consumption of another person.