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Introduction

  • There are a variety of different types of goods and services that are produced in market economies. 
  • These goods and services are categorized determined upon whether or not they are rival and excludable. 

Definitions

  • Excludable: Excludable goods are goods that you can prevent people from using if they have not paid for those goods Eg: Your clothes👕
  • Rival: Rival goods are goods that can only be used by a single user. Eg: Hamburger🍔

Types of goods

There are four different types of goods and services in an economy:

  • Private Goods: Private goods are both excludable and rivalrous, meaning that they cannot be used by those who did not pay for them and by anyone except the first user.
  •  Examples of such goods include toothpaste, cars, mobile phones, etc.  🚗
  • Club Goods: Club goods are goods that are excludable but non-rival, meaning that unlike private goods they can be used by multiple people.
  •  Examples of these goods include private schools, toll roads, chartered buses, etc. 🎓
  • Common Resources: Common-pool resources are rivalrous but non-excludable, meaning that they can only be used once but are open to all for use, even those who do not pay for the use of these goods.
  •  Examples include pine nuts, tree bark, toilet paper in public restrooms, etc. 🌲

And last but not least!

  • Public Goods: Public goods are non-rival and non-excludable, meaning they can be used for those that do not pay for them and can be used by multiple people. 
  • Examples of these goods include public restrooms, public parks, and non-toll roads. 🚽

To further your ability to understand these goods, here is a visual: 

Citation: 

“Perhaps News Is a Public Good.” A Random Stranger, 5 July 2017, 04:44:00 PM, arandomstranger.blogspot.com/2017/07/perhaps-news-is-public-good.html.

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