Question

Explain the difference between a public good and a common pool resource. Provide an example of each. Answer in five sentences or fewer.

Answer 1

Public Goods are those goods which are non-rival and non-excludable in nature. For example fresh air. Intake of fresh air by one individual does not reduces its availability for others and individuals can be stopped from consuming it. On the other hand, common pool goods are non-excludable but rivalry in nature. For example fish stocks in international waters. No one is excluded from fishing but as people withdraw fish, the stock for later individuals gets depleted.

Note:

Rival: It means that consumption by one individual reduces the availability of the good for others.

Excludable: It means that people can be excluded from using the good.