Principles of Microeconomics / Unit 12 MIC 1111 worked example, 60 to 90 seconds
Classifying Goods by Excludability and Rivalry
The idea
Put any good in a two-by-two table. Ask first whether a non-payer can be kept out, and second whether one person's use leaves less for others. Excludable and rival is a private good. Nonexcludable and non-rival is a public good. Nonexcludable but rival is a common resource, where open access leads to overuse. Excludable but non-rival is the fourth cell, which the course calls a club good: fenced, but free to share up to capacity. Then say what the classification implies for provision.
In practice
Worked example, six goods. A slice of pizza: excludable, rival, private. A lighthouse's beam: no ship can be barred from seeing it and one more ship dims it for nobody, public. Fish in an open ocean: nobody can be barred and every fish caught is one fewer, common resource. Subscription satellite radio: the signal is scrambled for non-payers yet one more listener costs nothing, club good. An uncrowded toll road: excludable at the booth and non-rival until it fills, club good; the same road at rush hour becomes rival. A free city park: nobody is barred, and it is non-rival until it is crowded and rival after.
Where people slip
Rivalry changes with congestion, so classify at the use level in question. And the table says how a good behaves in a market; it does not say who ought to provide it, which is a separate question.
Your place on the trail
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