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emlaai emlaai
wrote...
Posts: 318
3 days ago

Question 1.

Determine if each of the products below displays any of the following characteristics:

(i)

rivalry

(ii)

nonrivalry

(iii)

excludability

(iv)

nonexcludability.


a.

a freeway during peak commute hours

b.

an online college course

c.

infectious disease prevention

d.

open source software such as Linux

e.

a movie showing at Century Theatres


Question 2.

"When it comes to public goods, individuals do not reveal their true preferences because it is not in their self interest to do so." Evaluate this statement.

Textbook 

InMicro


Edition: 1st
Authors:
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Answer verified by a subject expert
kiyomikakiyomika
wrote...
Posts: 322
Rep: 9 0
3 days ago
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Answer 1

a.

rivalry due to traffic congestion although entry onto the freeway is nonexcludable

b.

nonrival but excludable because those who did not pay for the course may not take the course

c.

nonrival and nonexcludable

d.

nonrival and nonexcludable

e.

nonrival but excludable since admission requires purchase of a ticket


Answer 2

The statement is true. For example, in the case of a private good such as a hamburger, a consumer either reveals her willingness to pay by purchasing the good at the market price or goes without it. This is not the case with a public good. Once produced, individuals cannot be excluded from consuming the good even if they have not paid for the good. Therefore, it is in a consumer's interest not to reveal her true preferences for the good.

This verified answer contains over 330 words.
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3 days ago
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