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A model to teach non-rival and excludable goods in undergraduate microeconomics

Aaron D. Wood

International Review of Economics Education, 2017, vol. 24, issue C, 28-35

Abstract: Non-rival and excludable goods, often referred to as artificially-scarce goods or club goods, are discussed in principles of microeconomics textbooks, but they are not given a rigorous graphical analysis. This paper presents a model for non-rival and excludable goods that aligns with the intuition conveyed in introductory microeconomics textbooks. The model enables students to develop a rigorous understanding of the theory of non-rival and excludable goods, and it includes an allocatively efficient outcome, a private outcome, and a second-best solution outcome to exhibit the relative prices, quantities, profits, and welfare results that emerge in different regulatory frameworks. A numerical exercise solidifies the concepts presented in the theoretical model.

Keywords: Artificially-scarce goods; Club goods; Economics education; Principles of microeconomics; Firm theory; Regulation (search for similar items in EconPapers)
Date: 2017
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