Question 6 (a)
Public goods and common resources, defined with examples
6 marks
- Time to write
- About 12 minutes
Question
Question 6 (a) · 6 marksDefine public goods and common resources with examples?
Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.
Before you write
Read off the question and its marks
Read from the question
- with examplesExamples are asked for: one short example with each point.
Write it in this order
- Read; underline the asks; jot your points 1 min
- 1 The two tests, rivalry and excludability 1 mark 2 min
- 2 Public goods defined, with examples 2 marks 3 min
- 3 Common resources defined, with examples 2 marks 3 min
- 4 How the two differ, and the problem each creates 1 mark 2 min
- Check: every ask answered, key terms underlined 1 min
Short on time? Trim steps 2 and 3 evenly rather than skip one: each is capped at its own marks. End with step 4 in a line or two.
Try it first. About 12 minutes for 6 marks. Write it out, then open the solution.
Solution
Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.
Two tests for sorting goods. Economists classify a good by asking two questions about it:
- Is it rival in use? A good is rival when what one person consumes is no longer there for anyone else; it is non-rival when one person's use leaves the amount available to others unchanged.
- Is it excludable? A good is excludable when those who have not paid can be kept from using it; it is non-excludable when keeping people out is practically impossible, or possible only at a very high cost.
A good that passes both tests (rival and excludable) is a private good, such as a plate of chole bhature bought at a stall.
Public goods. A pure public good is one that is both non-rival and non-excludable. Once it is provided, everyone in the area enjoys it, and one more person enjoying it takes nothing away from the rest. Examples, our own:
- A flood-warning siren in a town on the Brahmaputra in Assam. Every household within earshot is warned, whether or not it contributed to the cost, and one family hearing the siren does not make it any fainter for the next.
- A mosquito-fogging drive across a whole colony in Delhi. No house in the sprayed area can be left out, and the protection one family gets does not reduce what its neighbours get.
The textbook cases are national defence and law and order: a whole country or locality is protected at once, and no resident can be denied that protection for refusing to pay.
Common resources. A common resource is rival but non-excludable: what one user takes leaves less for the others, yet no one can easily be stopped from taking it. Examples, our own:
- Firewood and fodder in an unfenced forest patch shared by several villages in Jharkhand. A bundle of wood one family carries home is not there for another family (rival), but with no fence or guard nobody can be kept out (non-excludable).
- Free kerbside parking on a crowded market street in Kanpur. A slot one car occupies cannot be used by another driver (rival), but as long as parking is free and unmanaged, any driver may take a slot (non-excludable).
| Basis | Public good | Common resource |
|---|---|---|
| Rival? | No | Yes |
| Excludable? | No | No |
| Problem it creates | Free riding: people enjoy it without paying, so a market supplies too little of it | Over-use: each user ignores the loss she causes to others, so the resource is used beyond the efficient level, the tragedy of the commons |
| Usual remedy | Provision by the government, judged by comparing total benefit with total cost | Clearly defined property rights, which give someone the power to exclude |
The lines between the categories are not fixed. Free parking turns excludable once a contractor starts charging a fee, and a public good can become rival when it gets crowded.
Conclusion. Both public goods and common resources are non-excludable. A public good is also non-rival, as with a flood siren, and tends to be under-supplied because people ride free; a common resource is rival, as with shared forest firewood, and tends to be over-used.
Where the 6 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | The two tests, rivalry and excludability | 1 |
| 2 | Public goods defined, with examples | 2 |
| 3 | Common resources defined, with examples | 2 |
| 4 | How the two differ, and the problem each creates | 1 |
| Total | 6 |
Report a problemopens an email to admin@getkunji.com with the question ID2555-Q6aalready filled in.