Question

Private, common, and public goods: Provide a brief synopsis of the differences between private, common, and public goods, and the value of this difference to the economy.

Answer 1

Private goods and excludable and rival. They have to be purchased before they are consumed. They can only be consumed by people who can afford them. Those who don't afford them are excluded. Consumption of private goods by some individuals prevents others from consuming them.

Public goods are non-excludable and non-rival. They can be consumed by anyone without affecting the availability to other people.

Common goods are non-excludable but rival. They can be consumed by everyone but it is subject to availability. If some individuals consume these goods, they may not be available for consumption to other individuals though they are not excluded.