Work through the list without notes. If you cannot do a statement, follow its link, then come back. Guide = study guide; Practice = practice questions.
Understanding
- I can define rival and excludable, and judge excludability by what is practical rather than what is legal. (Guide: “Two questions about any good”; Practice Q1)
- I can classify a good as a private good, a public good or an open-access resource, giving a reason for each test. (Guide: Figure 1; Practice Q1, Q6(a), Q7(a))
- I can explain why government provision does not make a good public, using schooling as an example. (Guide: “Private goods provided free by government”; Practice Q3)
- I can explain why non-rivalry means that, once a public good exists, one more user costs nothing extra. (Guide: “Public goods and the free rider problem”)
Calculation and graphing
- I can add up all users’ benefits from a public good, compare the total with its cost, and decide whether to provide it. (Guide: Worked example 1; Practice Q6(b), Q6(e))
- I can calculate an equal tax to fund a public good and each group’s net gain. (Guide: Worked example 1(c); Practice Q6(d))
- I can find the open-access and efficient number of users from a table, using the share per user and the extra output added. (Guide: Worked example 2; Practice Q7)
- I can draw an open-access resource graph with D = MSB, MPC and MSC, and shade the deadweight loss of overuse. (Guide: Figure 2; Practice Q5)
Reasoning
- I can explain the free rider problem and why it stops private firms from providing public goods. (Guide: “Public goods and the free rider problem”; Practice Q2, Q6(c))
- I can explain why open-access resources are overused, naming the cost each user imposes on others. (Guide: “Open-access resources and overuse”; Practice Q4, Q7(d))
- I can suggest a quota, licence, fee or property right to limit overuse, and explain how it works. (Guide: Worked example 2(d); Practice Q5(c), Q7(e))
- I can explain why a tax-funded public good can raise total surplus while some taxpayers lose. (Guide: Worked example 1; Practice Q6(d))
All ticked? Move on to Topic 6.4, The Effects of Government Intervention in Different Market Structures, or return to the course roadmap.