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Section 1 is an uncongested non-toll road. Section 2 is a congested non-toll road. Section 3...

  • Section 1 is an uncongested non-toll road.
  • Section 2 is a congested non-toll road.
  • Section 3 is an uncongested toll road.
  • Section 4 is a congested toll road.

Use the terms of "excludability" and "rivalry in consumption" to explain which of these four sections is:

(a) A Private Good.

(b) A Common Resource.

(c) A Club Good.

(d) A Public Good.

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Answer #1

1. Uncongested non toll road is both non excludable (because one doesn't have to pay to use this road) and non rival in Consumption (as its an uncongested road, so one person's use of the road doesn't reduce the amount available to others). Therefore, its a public good.

2. A congested non toll road is non excludable but rivalry in Consumption (as the road is congested, so one person's use of the road reduces the space available to others). Therefore its a common resource.

3. Uncongested toll road is excludable because one has to pay toll tax to use the road, and non rival in Consumption (because it is uncongested), so its a club good.

4. Congested toll road is both excludable and rival in Consumption, so its a private good.

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