ECON 1001 Erhardt Final | Actual study | Questions and Answers

ECON 1001 Erhardt Final | Actual study |
Questions and Answers
Excludability - ANSW-the property of a good whereby a person can be prevented from using it
Rivalry in Consumption - ANSW-The property of a good whereby one person's use diminishes other
people's use.
Private Goods - ANSW-goods that are both excludable and rival in consumption
Public Goods - ANSW-Goods that are neither excludable nor rival in consumption
Common Resource - ANSW-goods that are rival in consumption but not excludable
Free Rider - ANSW-a person who receives the benefit of a good but avoids paying for it
Positive Externality - ANSW-Positive impact to other firms
Corrective Tax - ANSW-a tax designed to induce private decision makers to take account of the social
costs that arise from a negative externality
Cost-benefit analysis - ANSW-a study that compares the costs and benefits to society of providing a
public good (highways)
Tragedy of the Commons - ANSW-a parable that illustrates why common resources are used more than is
desirable from the standpoint of society as a whole
Externalities - ANSW-the uncompensated impact of one person's actions on the well-being of a
bystander