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V. Answer the following questions:

  1. What is the difference between public goods and private goods?

  2. What three characteristics do public goods have?

  3. How do we call a phenomenon, when a person consumes a valuable good or service without having to pay?

A. Why is information a public good?

  1. Why is reputation important?

  1. How does the state attempt to stimulate technological or recorded innovations?

VI. Define the terms:

registered trademark public goods

free riding patent

positive externalities information

reputation copyright

VII. Translate into English:

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TOBapy cynpOBOflJKyCTbCB n03MTMBHMMM 30BHillJHiMH BHJlBa-

134

135

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VIII. Read and dramatize the following dialogue:

M.: Why if it isn't Bob! Never expected to meet you at this shop. This is a small world!

B.: Hi, Mike! I've got to do some shopping.

M.: So you are to buy some goods for yourself. And do you know that there are things in this world that you can't consume alone.

B-; Really. I've never heard about this.

M.: Yes, you have, but never realized it. I'll fry to explain this to you in some words.

B-; That's rather interesting.

M.: So, some goods can be consumed by one person and still be available for consumption by others. For example, you can enjoy the light, colour, noise and excitement associated with fireworks without affecting the ability of your neighbour to also enjoy the fireworks. Or, you can capture the signal from a television station and use it without affecting anyone else's ability to capture and use the same signal.

6.: And can we take as an example of such a case a ship at sea. It can use the services of a lighthouse that warns of a danger without affecting the use of the lighthouse service by other ships in the area.

M.: And police services make a city safer for all of its citizens — I «consume» safety, but this does not affect your ability to ^consumes safety. National defense provides security for one citizen at the same time as it provides the same service for another citizen.

B-: I see. Each of these goods or services is different from an apple, a loaf of bread, a seat at a rock concert, or the medical services provided by a doctor.

M.: Yes, you are quite right. If you consume an apple, no one else can consume the same apple. It's gone. Similarly with a loaf of bread — your consumption precludes someone else's consumption. When you occupy a seat at

a rock concert, no one else can occupy the same seat. If

you spend one hour with your doctor, the doctor cannot

provide the same hour's service to another patient. B.; Oh! I've never thought about this. And what do economists

call such goods. M.: They call them public goods, as they differ from the usual

goods and services that we privately enjoy. B..' Thank you for the information. That was really new to

me. M..' If you want to know more about public goods you may

read a book on economics. B..' Thank you. Bye, M.: Bye.

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