Economics 121 B & C

Quiz 1

September 12, 1997

Prof. A. D. Becker

 

Name:___________________________

In a sentence or two, define the following three terms and give an example of each.

  1. Private good

A private good is "rival" (one person's consumption of it reduces the amount left for others) and "excludable" (people can be prevented from enjoying the benefits of its use).

The can of ginger ale that I am drinking as I type this is an example of a private good.

  1. Public Good

    2. A public good is neither rival nor excludable.

    Broadcast TV is an example of a public good.

  2. Opportunity Cost

The opportunity cost of a choice or decision is the value of the best alternative.

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