PUP 3002 Ch 3 FSU Exam Questions
and Answers
determinants of demand - ANSWER-buyer's income, value of other substitutes
change in demand - ANSWER-when a determinant of demand changes (shifting
curve)
market equilibrium price - ANSWER-when the price of a good is established via
perfect competition under the condition that the demand for the good exactly equals
the supply of the good
property rights - ANSWER-the exclusive right to determine how a resource or
property is to be used
rivalrous good - ANSWER-a good whose use or consumption will limit or eliminate
the supply of that specific good to others
non-rivalrous good - ANSWER-a good whose use does not deplete the availability of
the good
excludable good - ANSWER-a good whose use or consumption by others can be
restricted by the owner of the good
non-excludable good - ANSWER-a good whose access cannot be or is exceedingly
difficult to deny, regardless of who owns the good
Private Good - ANSWER-goods that are both rivalrous and excludable (food,
clothing)
Common Good - ANSWER-goods that are non-excludable but rivalrous (forest/fish
stocks)
Club Good - ANSWER-goods that are excludable and non-rivalrous (netflix, Sams)
Public Goods - ANSWER-goods that are non-excludable and non-rivalrous (clean
air)
monopoly - ANSWER-situation where a single seller of a good or service faces many
buyers
negative externality - ANSWER-any costs borne when a third party is harmed or
otherwise negatively affected by a transaction to which they are not a party
and Answers
determinants of demand - ANSWER-buyer's income, value of other substitutes
change in demand - ANSWER-when a determinant of demand changes (shifting
curve)
market equilibrium price - ANSWER-when the price of a good is established via
perfect competition under the condition that the demand for the good exactly equals
the supply of the good
property rights - ANSWER-the exclusive right to determine how a resource or
property is to be used
rivalrous good - ANSWER-a good whose use or consumption will limit or eliminate
the supply of that specific good to others
non-rivalrous good - ANSWER-a good whose use does not deplete the availability of
the good
excludable good - ANSWER-a good whose use or consumption by others can be
restricted by the owner of the good
non-excludable good - ANSWER-a good whose access cannot be or is exceedingly
difficult to deny, regardless of who owns the good
Private Good - ANSWER-goods that are both rivalrous and excludable (food,
clothing)
Common Good - ANSWER-goods that are non-excludable but rivalrous (forest/fish
stocks)
Club Good - ANSWER-goods that are excludable and non-rivalrous (netflix, Sams)
Public Goods - ANSWER-goods that are non-excludable and non-rivalrous (clean
air)
monopoly - ANSWER-situation where a single seller of a good or service faces many
buyers
negative externality - ANSWER-any costs borne when a third party is harmed or
otherwise negatively affected by a transaction to which they are not a party
