Multiple Choice
Which of the following best explains why states may prefer categorical grants to block grants when funding public goods?
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8. The Types of Goods
Public Goods: Demand Curve and Optimal Quantity
Multiple Choice
Contests, lotteries, and competitions with prizes are common examples of:
A
Private goods
B
Pure public goods
C
Artificially scarce goods
D
Common resources
Verified step by step guidance1
Step 1: Understand the definitions of the types of goods involved. Private goods are excludable and rivalrous, meaning consumption by one person prevents consumption by another, and people can be prevented from using them.
Step 2: Pure public goods are non-excludable and non-rivalrous, meaning no one can be excluded from using them, and one person's use does not reduce availability to others.
Step 3: Common resources are goods that are rivalrous but non-excludable, so they can be depleted by overuse but are difficult to restrict access to.
Step 4: Artificially scarce goods are excludable but non-rivalrous up to a point, meaning people can be prevented from using them, but one person's use does not reduce availability to others until capacity is reached.
Step 5: Contests, lotteries, and competitions with prizes fit the category of artificially scarce goods because access is limited (excludable) but the good itself (the contest or lottery) does not diminish with additional participants until a certain limit.
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