Tradable Goods

  

Categories: Econ

Beaver pelts. Tons of coal. Slightly used lawnmowers. They're all tradable goods. Pretty much 99.999% of all goods are tradable.

So...what's not? Nuclear bombs. Yellow cake from Chad (which is used to make bombs). Child porn. (Michael Jackson albums are, however, still tradeable.) National monuments. Ancient relics that probably belong to another nation. Human beings. None of those are tradeable. Not even on eBay.

Related or Semi-related Video

Econ: What are Public Goods?3 Views

00:00

And finance Allah shmoop What are public goods order Well

00:07

the public has a lot of things mostly opinions but

00:10

also goods like public goods or goods or services that

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all people of society have access to which are created

00:16

for public benefit rather than profit If you want to

00:19

get all technical about it well public goods are non

00:22

excludable and non rivalrous Well non exclude ability means that

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nobody is excluded Even if someone didn't cough up any

00:31

cash to receive the benefits of that good whether you

00:33

paid your taxes or not you can go to the

00:35

park into the library Didn't pay Doesn't matter We'LL Non

00:39

rival risk means that more and more people can consume

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the good without additional costs and without preventing others from

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consuming the good There Yeah just because your breathing the

00:50

air While that doesn't stop your neighbor from doing so

00:52

you can take your dog on a walk in the

00:54

park which won't stop others from indulging in the parks

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Um you know Park nous well to contrast what's excludable

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and rivalrous I e The opposite of a public good

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Well a private good like How about roller coasters A

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roller coaster is rival risk since there can be only

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so many people on the roller coaster at once if

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the theme park is conforming Teo you know safety regulations

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Anyway The roller coaster is also excludable because well you

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have to pay to get into the theme park to

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ride the roller coaster because well theme parks care about

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profit Roller coasters are definitely private goods Will public good

01:29

sound pretty great right There's something you topic about them

01:33

Everyone can use them at the same time and without

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paying a cent But they have their fair share of

01:38

problems just like private goods The biggest issue is the

01:40

free rider problem which is well when people take advantage

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of public goods by not paying their fair share of

01:46

the good For instance if you've ever watched a firework

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show from afar for free when it cost money to

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get closer well then you're a free rider You benefited

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from the fireworks show but you didn't pay for it

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and you couldn't be excluded from watch Sing it since

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it's like you know in the sky well when people

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get the benefits without having to pay for the costs

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of that benefit Many goods and services that people would

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otherwise be willing to pay for will disappear or never

02:11

make it to the market at all Take our fireworks

02:13

Example If everybody decided to free ride and watch the

02:16

fireworks show from a bit farther away for free and

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nobody bought tickets to that firework show well then they're

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probably not going to be one next year The moral

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of the story while too much free riding kills firework

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shows and you know other goods which is why exclude

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ability and property lines are so important at least important

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to respect A theme park wouldn't last long if there

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wasn't a wall surrounding it and you could just walk

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in and ride the roller coasters for free The free

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rider problem goes hand in hand with positive externalities like

02:46

positive externalities air benefits somebody gets without paying for them

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and without necessarily even asking for them For instance if

02:54

you love firework shows and happen to have a great

02:56

view of firework show from your backyard while you just

02:58

got a positive externality the fireworks show producer can't charge

03:02

you for viewing the show from your own backyard Maybe

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there would be more firework shows if they could make

03:08

them mohr excludable reducing the positive vibes or positive externalities

03:13

that they're given out for free right So what makes

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our public goods like parks and libraries work well The

03:19

free rider problem is avoided because those goods are typically

03:21

paid for by the government which means it's funded by

03:23

taxes And who pays taxes You D'Oh The public does

03:27

anyway the people who work which means free riding isn't

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a problem because most people are already paying for the

03:33

parks and libraries Oh whether they like it or not

03:35

People who aren't paying taxes are free riding when they

03:39

hang out in the park in the library But because

03:41

the numbers of free riders air so few well it

03:43

doesn't really affect the funding of those goods And at

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least as a present it's not problematic enough to make

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libraries and parks shut down But we'LL see what the

03:52

future holds here What else are you free riding If

03:54

you're not paying your fair share of taxes while things

03:57

that everyone in the country benefits from like national defense

04:00

it's an access to clean air and water Public radio

04:04

Yeah that's a freebie to All right Well free riding

04:07

That isn't Okay Well the free riding Nicolas Cage does 00:04:10.095 --> [endTime] in Ghost Rider Yeah So not Okay Hi

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