Consider the following:
(i) Consider an uncrowded highway that has limited access. Is this good nonrivalrous, nonexcludable, or both? Explain.
(ii) Consider a major city's downtown streets during rush hour. Is this good nonrivalrous, nonexcludable, or both? Explain.
(i) Since the highway is uncrowded, an additional person can use the highway at no additional cost, so the highway is nonrivalrous. However, since the highway has limited access, it would be relatively easy to set up toll booths and prevent a person from using the highway. Therefore, the highway is not a nonexcludable good.
(ii) An additional person adds to the congestion of rush hour, so the use of downtown streets is not a nonrivalrous good. On the other hand, it would be extremely difficult to prevent any one person from having access to the downtown streets, so their use is nonexcludable.
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