Is the Baltimore and Potomac Tunnel a private good, a public good, a club good, or a common resource?
The Baltimore and Potomac Tunnel is a _____________.
Wrong! - Can users of the Baltimore and Potomac Tunnel be excluded from using it? How many trains can run on a track through the tunnel at the same time? Is the tunnel rival? Is the Baltimore and Potomac Tunnel a private good, common resource, or club good for users of the tunnel?
Can you think of a nonuser who benefits from the Baltimore and Potomac Tunnel? Is the tunnel rival and excludable for this nonuser? Is the Baltimore and Potomac Tunnel a private good, a public good, a common resource, or a club good for this nonuser?
Correct! - The Baltimore and Potomac Tunnel is a private good for users of the tunnel because it is excludable and rival. If the price to use the tunnel is sufficiently high, some users can be excluded. And the Baltimore and Potomac Tunnel is rival because only a given number of trains can use it at one time. But nonusers who benefit from the service of the tunnel can’t be excluded and they don’t rival other nonusers, so for nonusers, the Baltimore and Potomac Tunnel is a public good.
