February 2016
Beginner to intermediate
500 pages
33h 40m
English
Previous chapters focused on private goods, which have the properties of rivalry and exclusion. A rival good is used up as it is consumed. If Jane eats an orange, that orange is gone so no one else can consume it. Exclusion means that others can be prevented from consuming the good. If Jane owns an orange, she can easily prevent others from consuming that orange. Thus, an orange is subject to rivalry and exclusion.
If a good lacks rivalry, everyone can consume the same good, such as clean air or national defense or the light from a streetlight. If a market charges a positive price for that good, a market failure occurs because the marginal cost of providing the good to one more person is zero.
If the good ...