Question

What kind of good is it? Determine whether each of the following goods is a private good, a public good, a common resource, or a club good.

A. A large, beautiful fountain in a park
B. A dock on a lake that is open to the public
C. A new drone that you take turns flying with your friends

Answer 1

Answer:

A. Public good

B. Common resource

C. Private good

Explanation:

A. Here, a fountain in the park is a public good as it is freely available to everyone. Its consumption is non-rival and non-excludable. Everyone can consume it without reducing the consumption of others.

B. A dock on the lake is not a public good because people cannot use it freely. To use it people need to pay so those who don't pay can be excluded. Too many people cannot use it at the same time. So we can say it is a common resource whose consumption is expensive.

C. A new drone is a private good. Its use depends on ownership if one person is using it at a time another person cannot. People can be excluded from using it based on ownership.