| | |Long Run v. Short Run || 2% || in the long run all costs are variable and can be minimized; short and long run mentioned in 20% of questions, to distinguish between quick changes and permanent ones | | |Long Run v. Short Run || 2% || in the long run all costs are variable and can be minimized; short and long run mentioned in 20% of questions, to distinguish between quick changes and permanent ones |
| | A public good is a good which is nonexcludable and nondepletable. The first condition means that it is impossible to exclude consumers from partaking in the good, and the second condition means that one consumer's consumption of the good does not prevent others from consuming it. | | A public good is a good which is nonexcludable and nondepletable. The first condition means that it is impossible to exclude consumers from partaking in the good, and the second condition means that one consumer's consumption of the good does not prevent others from consuming it. |
| − | Explained another way, a public good is available to all such that consumption by one person does not reduce its availability to others. An example of a public good is national defense, as it protects everyone and its benefits to one person does not diminish its benefits to others. | + | Explained another way, a public good is available to all such that consumption by one person does not reduce its availability to others. An example of a public good is national defense, as it protects everyone and its benefits to one person do not diminish its benefits to others. |
| | Other examples of public goods are law enforcement (protection by the police), public fireworks, clear air, street lights, radio and television transmissions, lighthouses, and some inventions. Some of these examples, such as lighthouses, are contested as to whether they must be a public good, as it is possible to charge ships port fees to pay for them. Also, while radio and television transmissions are available to all to receive them, it does cost money to buy radios and television sets, so these are not truly public goods either. | | Other examples of public goods are law enforcement (protection by the police), public fireworks, clear air, street lights, radio and television transmissions, lighthouses, and some inventions. Some of these examples, such as lighthouses, are contested as to whether they must be a public good, as it is possible to charge ships port fees to pay for them. Also, while radio and television transmissions are available to all to receive them, it does cost money to buy radios and television sets, so these are not truly public goods either. |