1. Within the context of characteristics of goods, define the concepts of excludability and rivalry. Based on these characteristics, discuss when a good is classified as a private good, public good, common resource, and natural monopoly.
2. Tarzan and Jane live alone in the jungle and have trained Cheetah both to patrol the perimeter of their clearing and to harvest tropical fruits. Cheetah can collect 3 pounds of fruit an hour and currently spends 6 hours patrolling, 8 hours picking, and 10 hours sleeping. What are the public and private goods in this example? Explain your answer. Also, if Tarzan and Jane are each currently willing to give up one hour of patrol for 2 pounds of fruit, is the current allocation of Cheetah’s time Pareto efficient? Should he patrol more or less? Explain.
3. Consider smoking in a classroom, where students have the right to clean air. What types of externality does smoke in a classroom convey? Explain. How could this externality be solved according to Coase Theorem? Explain. How would it be solved using taxation/subsidies? Explain.
4. Explain what charter school and school voucher program are. Discuss how charter schools and voucher programs may affect public education.