Characteristics of Goods in Microeconomics Quiz

Normal goods are those for which demand increases as income increases.

Public goods are non-excludable, meaning individuals cannot be effectively excluded from use.

Merit goods produce positive externalities and are under-consumed in a free market.

Private goods are both excludable and rivalrous, meaning consumption by one reduces availability to others.

Cross elasticity of demand measures how sensitive the demand for one good is to changes in the price of another.

Elasticity of demand measures how sensitive quantity demanded is to changes in price.

Perfectly competitive markets have easy entry and exit for firms.

For normal goods, as income rises, demand also increases.

Firms in monopolistic competition differentiate through product features, advertising, and branding.

Free riders benefit from a good or service without contributing to its production or cost.

Public goods can be consumed by many individuals simultaneously without diminishing the good.

Perfectly inelastic demand means quantity demanded remains constant regardless of price changes.

External costs are negative spillover effects imposed on third parties not involved in the activity.

Antitrust laws aim to ensure fair competition and prevent the abuse of market power.

Club goods are excludable but non-rivalrous, meaning exclusion is possible but consumption by one does not reduce availability to others.