13.5: Key Terms
- Page ID
- 181411
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- external benefits (or positive externalities)
- beneficial spillovers to a third party of parties, who did not purchase the good or service that provided the externalities
- free rider
- those who want others to pay for the public good and then plan to use the good themselves; if many people act as free riders, the public good may never be provided
- intellectual property
- the body of law including patents, trademarks, copyrights, and trade secret law that protect the right of inventors to produce and sell their inventions
- nonexcludable
- when it is costly or impossible to exclude someone from using the good, and thus hard to charge for it
- nonrivalrous
- even when one person uses the good, others can also use it
- positive externalities
- beneficial spillovers to a third party or parties
- private benefits
- the benefits a person who consumes a good or service receives, or a new product's benefits or process that a company invents that the company captures
- private rates of return
- when the estimated rates of return go primarily to an individual; for example, earning interest on a savings account
- public good
- good that is nonexcludable and non-rival, and thus is difficult for market producers to sell to individual consumers
- social benefits
- the sum of private benefits and external benefits
- social rate of return
- when the estimated rates of return go primarily to society; for example, providing free education