Chapter 11: Public Goods and Common Resources

Chapter 11 essentially answers the question: who produces/distributes the good? The chapter compares two ends of the spectrum regarding the distribution of goods: private goods and public goods. To categorize whether a good is private or public, the two determinants are whether the good is excludable or a rival in consumption. If a good is excludable, consumers can be prevented from buying the good due to their willingness to pay. If a good is a rival in consumption, consumers only have a limited quantity available, a good example is sports tickets (Cubs tickets if we really want to emphasize a rival in consumption). Tying these two concepts back to public and private goods, we use them to see how to classify a good. If a good is neither a rival or excludable, it is a public good because the government can provide it to the entire public. If a good is excludable or a rival, then a private company will provide the good to make profits.