Goods that are not excludable include both
private goods and public goods.
club goods and common resources.
common resources and public goods.
private goods and club goods.
The Correct Answer and Explanation is :
The correct answer is common resources and public goods.
Explanation:
Goods can be categorized based on two key properties: excludability and rivalry. These properties help to classify goods into four types: private goods, public goods, club goods, and common resources.
- Excludability refers to whether individuals can be prevented from using the good. For example, a private company can prevent people from using a product if they haven’t paid for it.
- Rivalry refers to whether one person’s use of the good reduces the availability for others. For example, if someone eats an apple, no one else can eat that same apple.
Now, let’s break down the categories:
- Private Goods: These are both excludable and rivalrous. For example, a sandwich is a private good because if you buy it, others are excluded from consuming it, and eating it means no one else can eat that particular sandwich.
- Public Goods: These are non-excludable and non-rivalrous. Public goods, such as clean air or national defense, can be used by anyone, and one person’s use doesn’t prevent others from using it.
- Club Goods: These are excludable but non-rivalrous. For instance, a subscription to a streaming service is a club good. Only paying customers can access the service, but one person watching a movie doesn’t stop others from doing the same.
- Common Resources: These are non-excludable but rivalrous. A fishery in the ocean is a common resource. People can access it without restriction, but if too many people fish, the resources are depleted, reducing availability for others.
Thus, common resources and public goods are the ones that are non-excludable, meaning people cannot be prevented from using them.
I’ll generate a visual illustration of these concepts now.
Here’s an illustration to help clarify the four types of goods based on excludability and rivalry. It shows the differences between private goods, public goods, club goods, and common resources. Let me know if you’d like more details!