… a core topic in Economic Analysis and Atlas102
This topic deals with public goods and commons problems.
The treatment of this topic on the Atlas follows almost precisely that in Chapter 14, Public Goods and the Tragedy of the Commons , in the open access Principles of Microeconomics course offered by Tyler Cowen and Alex Tabarrok at the Marginal Revolution University online education platform (http://www.mruniversity.com/courses/principles-economics-microeconomics , accessed 30 April 2016).
Topic learning outcome Appropriately utilize and interpret results of applying to the analysis of public policy and management problems the basic principles of public goods, including following core concepts.
Core concepts associated with this topic
Readings
We believe that this topic and its core concepts can be mastered to the MPP/MPA level by watching and re-watching the 27 minutes of MRU course videos listed below and doing the 28 sample questions associated with these video segments and reproduced at the bottom of this page and repeated on the appropriate concept pages.
Atlas pages: Public Goods and Commons Problems and associated Concepts.
Alex Tabarrok, Public Goods and Asteroid Defense, Marginal Revolution University, 2-minute video, at http://www.mruniversity.com/courses/principles-economics-microeconomics/public-goods-example-asteroid-defense , accessed 4 May 2016.
Alex Tabarrok, A Deeper Look at Public Goods, Marginal Revolution University, 8-minute video, at http://www.mruniversity.com/courses/principles-economics-microeconomics/public-goods-definition-nonexcludable-nonrival , accessed 4 May 2016.
Alex Tabarrok, Club Goods, Marginal Revolution University, 5-minute video, at http://www.mruniversity.com/courses/principles-economics-microeconomics/club-goods-examples , accessed 4 May 2016.
Alex Tabarrok, The Tragedy of the Commons, Marginal Revolution University, 12-minute video, at http://www.mruniversity.com/courses/principles-economics-microeconomics/tragedy-of-the-commons-examples-economics , accessed 4 May 2016.
Recommended reading in MPP and MPA programs
University of Toronto: PPG-1002
Varian, Hal R., and Jack Repcheck. Intermediate microeconomics: a modern approach. Vol. 6. New York, NY: WW Norton & Company, 2010. Chapter 36 (p. 695-718).
Carleton Unversity: PADM-5111
Frank, Robert, Ian Parker, and Igela Alger. Microeconomics and Behaviour, 5th Canadian Edition. New York: McGraw-Hill, 2013. Chapter 16 and 18.
Harvard Kennedy School: API-101
Pindyck, Robert S. and Daniel L. Rubinfeld. Microeconomics, 8th Edition. Prentice-Hall, 2012. Chapter 18 (661-690).
NYU Wagner: GP-1018
Krugman, Paul and R. Wells. Microeconomics, 3rd edition. London: Worth Publishers, 2012. Chapters 6 and 7 (up to p. 201).
Johnson-Shoyama: JS-805
Krugman, Paul, Robin Wells, and Anthony Myatt. Microeconomics: 1st Canadian Edition. London: Worth Publishers, 2006. Chapters 18 – 20.
Weimer, David L. and Aidan R. Vining. Policy Analysis, 5th edition. London: Longman Publishers, 2011. Chapters 5 – 7.
George Washington: PPPA-6003
Mankiw, N. Gregory. Principles of Microeconomics, 6th edition. Mason: South-Western College Publishers, 2011. Chapters 10 and 11.
Wheelan, Charles. Naked Economics: Undressing the Dismal Science. New York: W. W. Norton & Company, 2010. Chapter 3.
American: PAUD-630
Krugman, Paul and R. Wells. Microeconomics, 3rd edition. London: Worth Publishers, 2012. Chapter 17.
UCLA: PLC-201
Goolsbee, Austan, Steven Levitt, and Chad Syverson. Microeconomics. New York: Worth Publishers, 2013.
Rutgers- Economics in Public Policy
Pindyck, Robert S., and D. Rubinfeld. Microeconomics, 7th edition. Upper Saddle River: Patience-Hall, 2007. Chapter 18.
Assessment questions
From http://www.mruniversity.com/node/313598 , http://www.mruniversity.com/node/313599 , http://www.mruniversity.com/node/313600 , http://www.mruniversity.com/node/3136001 , accessed 10 May 2016.
AQ102.11.01. What is the logic behind free riding?
My decision to buy or not buy doesn’t affect whether I receive the service
It’s better to get something for free than have to pay for it
Receiving the service is solely based on the decisions of others
All of the above
AQ102.11.02. Which of the following might have a free rider problem?
Mail delivery
A large fireworks display
Space tourism
All of the above
AQ102.11.03. We learned that asteroid defense is a public good. Which of the following group(s) of people, if any, would potentially value investment in asteroid defense more than the rest of humankind?
Men
Women
Old people
Young people
Men and young people only
There is no group that would value asteroid defense more than others
AQ102.11.04. If the world collectively decided to tax the population to invest in asteroid defense, who would be the free riders?
Older people who would die before it was built
Someone who lives in an underground bunker that is safe from any asteroid hit
Poor people who would prefer to not pay the tax and be at risk
Future generations
All of the above
AQ102.11.05. For each of the following items, decide first if the good is rival or nonrival and then whether it is excludable or non-excludable. Apples
Rival, excludable
Rival, non-excludable
Nonrival, excludable
Nonrival, non-excludable
AQ102.11.06. The Chinese Language
Rival, excludable
Rival, non-excludable
Nonrival, excludable
Nonrival, non-excludable
AQ102.11.07. Cable television
Rival, excludable
Rival, non-excludable
Nonrival, excludable
Nonrival, non-excludable
AQ102.11.08. Farm-raised salmon
Rival, excludable
Rival, non-excludable
Nonrival, excludable
Nonrival, non-excludable
AQ102.11.09. Yosemite National Park
Rival, excludable
Rival, non-excludable
Nonrival, excludable
Nonrival, non-excludable
AQ102.11.10. The idea of calculus
Rival, excludable
Rival, non-excludable
Nonrival, excludable
Nonrival, non-excludable
AQ102.11.11. Which of the following are free riders, which are forced riders, and which are just people paying for public goods? – In Britain, Alistair pays a tax to support the British Broadcasting Company. He doesn’t own a radio or TV.
Free rider
Forced rider
Paying taxes for public goods
AQ102.11.12. Monica pays her local property taxes and state incomes taxes. Police patrol her neighborhood regularly.
Free rider
Forced rider
Paying taxes for public goods
AQ102.11.13. In the United States, Sara pays taxes to fund children’s immunizations. She lives out in the forest, has no family, and rarely sees other people.
Free rider
Forced rider
Paying taxes for public goods
AQ102.11.14. In Japan, Dave, a tourist from the United States, enjoys the public parks.
Free rider
Forced rider
Paying taxes for public goods
AQ102.11.15. True or false: a public good is defined as one produced by the public sector.
True
False
AQ102.11.16. Some media companies (especially in music and movie industries) run ads claiming that downloading or copying media is the same thing as stealing a CD or DVD from a store. Let’s see if this is the case. Is a DVD a rival good?
Yes
No
AQ102.11.17. Suppose someone stole a DVD from a retail outlet. Regardless of how that person values the DVD, does the movie company lose any revenue as a result of the theft?
Yes
No
AQ102.11.18. Suppose someone illegally downloaded a movie instead of purchasing it. Also suppose that person placed a high value on the movie (they valued it more than the price required to purchase it legally). Does the movie company lose any revenue as a result of the theft?
Yes
No
AQ102.11.19. Suppose someone illegally downloaded a movie instead of purchasing it. Also suppose that person placed a low value on the movie (they valued it less than the price required to purchase it legally). Does the movie company lose any revenue as a result of the theft? Why or why not?
Yes
No
AQ102.11.20. Which of the following statements are true?
a. As the technology of home movie entertainment has changed from tapes and discs to digital files, home viewing of movies has changed from rival to non-rival.
b. Assuming the law is obeyed, as the technology of home movie entertainment has changed from tapes and discs to digital files, home viewing of movies has changed from excludable to non-excludable.
c. a and b
d. None of the above
AQ102.11.21. At some restaurants and grocery stores, you can buy bison burgers made from farm-raised bison. Is this good news or bad news if we want more bison around?
Good news
Bad news
AQ102.11.22. The nation of Alphaville has been hunting their deer population to extinction. The government decrees strict limits on the number of hunters, and on the number of rounds of ammunition that each hunter can take into the hunt. How do you think hunters will respond?
a. Decrease the quality of their ammunition
b. Increase the quality of their weapons
c. Increase the number of times they hunt
d. b and c only
e. All of the above
AQ102.11.23. In this video, we learn that chickens and the “chicken of the sea” (tuna) are fundamentally different in terms of population though they are both food. As population and prosperity has increased, the demand for chicken has increased. What happens to the price of chickens as a result?
It increases
It decreases
There is no change
Indeterminate from the given information.
AQ102.11.24. Because of the rules humans have concerning chickens, what happens to the number of people raising chickens as a result of the price change?
It increases
It decreases
There is no change
Indeterminate from the given information
AQ102.11.25. What happens to the number of chickens?
It increases
It decreases
There is no change
Indeterminate from the given information
AQ102.11.26. What happens to the price of tuna as population and prosperity increase?
It increases
It decreases
There is no change
Indeterminate from the given information
AQ102.11.27. Because of the rules humans have concerning tuna, what happens to the number of people harvesting tuna as a result of the price change?
It increases
It decreases
There is no change
Indeterminate from the given information.
AQ102.11.28. What happens to the number of tuna?
It increases
It decreases
There is no change
Indeterminate from the given information.
Page created by: Ian Clark, last modified on 16 May 2016.
Image: Minute 1:50 of MRU Video, at http://www.mruniversity.com/courses/principles-economics-microeconomics/public-goods-definition-nonexcludable-nonrival , accessed 4 May 2016.
Topic description