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What kind of good is it? Determine whether each of the following goods is a private good, a public good, a common resource, or a club good

Economics Dec 18, 2020

What kind of good is it? Determine whether each of the following goods is a private good, a public good, a common resource, or a club good. A large, beautiful fountain in a park. A dock on a lake that is open to the public. A new drone that you take turns flying with your friends

Expert Solution

First, a fountain in a park is non-rivalrous (ignoring congestion) and is not excludable, therefore the good is public. Now the park may be excludable because a fence can be built around it and entry tickets issued but we are going to assume that the park is an open public park and concentrate on the fountain.

Even if the lake is open to the public, a dock can be exludable because tickets can be issued for the right to park a boat and to gain access. It is also rivalrous because if one boat is docked then another boat cannot also use that spot. Therefore, the dock is a private good.

A drone that you share with your friends is both excludable and rivalrous and therefore is a private good.

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