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wireless router is just a box with antennas that allows you to
surf the Internet on your laptop anywhere within about a 200-foot
radius (about two-thirds of a football field). In a populated spot,
like an apartment complex, quite a few neighbors fall within that
200 foot range; and if you’re like a lot of people, you never
bothered to password protect access to your router and the valuable
Internet service it broadcasts.

So, what do you get when you mix an unsecured wireless router
with a densely populated neighborhood of Internet users–an ample
supply of digital “piggybackers” ready to access the Internet
through your router free of charge. Is piggybacking theft? Not
necessarily. Indeed, some people leave their routers unprotected
intentionally–“sticking it to the man” by unleashing free Internet
service for the masses. Problems arise, however, when too many
neighbors piggyback at once, clogging up bandwidth and reducing
your Internet connection speed to a trickle. An article in the New
York Times shows that a bit of benign wireless free-loading can
quickly turn into a miniature tragedy of the digital commons.

As you read the article, think about how you would classify
Internet service through a wireless router. Is the service a
private good, a natural monopoly, a public good, or a common
resource? What’s the difference between a password-protected router
and an unsecured one?

Read the original article, then click Continue to answer the
problems.

1.   According to Jonathan Bettino of Belkin, a corporation that
manufactures wireless routers, how many American households had
wireless access to the Internet in 2003?
A.  3.9 million
B.  16.2 million
C.  200 million
D.  48 million
2.   In 2004, the owners of tomshardware.com surveyed the Los
Angeles area for wireless networks. Of the networks logged by the
survey, how many were encrypted?
A.  5%
B.  15%
C.  30%
D.  45%
3.   Aside from free-loading neighbors, what other problems does an
unprotected wireless network invite?
A.  Theft of personal
information
B.  All these choices
C.  Outside use of your computer for
illegal activities
D.  Release of viruses

You can classify goods by asking a couple of questions:

Is the good rival?

Is the good excludable?

Asking the questions allows you to classify a good or service as
a private good, a natural monopoly, a common resource, or a public
good.

Question: Wireless router is just a box with antennas that allows you tosurf the Internet on your laptop a...
Rival Non-rival
Excludable Private good Natural monopoly
Non-excludable Common resource Public good
Question: Wireless router is just a box with antennas that allows you tosurf the Internet on your laptop a...

A good is excludable when people who don’t pay can be prevented
from using it. A good is rival when one person’s consumption of the
good reduces the amount available for others. Here are some
examples:

An apple is a private good–sellers can exclude those who don’t
pay, and fewer apples remain after a paying costumer eats one.

Cable television is a natural monopoly–cable providers can
exclude non-paying customers (although cable theft is not unusual),
but when one person watches a show there isn’t any less of the show
available for others.

A congested road is a common resource–anyone can drive on the
road without paying, but adding one more driver to the road
increases congestion and slows the trip for other drivers.

National defense is a public good–even tax evaders get
protection if America is threatened.

The services provided by wireless networks are more difficult
to classify than apples and national defense. The type of good that
characterizes a wireless network depends on the circumstances in
which the network is used. Are there a lot of piggyback users? Is
the network secure?

Use the table to help you classify the wireless networks in each of
the different scenarios below.

Question: Wireless router is just a box with antennas that allows you tosurf the Internet on your laptop a...
Rival Non-rival
Excludable Private good Natural monopoly
Non-excludable Common resource Public good
Question: Wireless router is just a box with antennas that allows you tosurf the Internet on your laptop a...
4.1.   Srihari lives in a densely populated apartment complex. He
purchases a wireless router but fails to secure his network with a
password. As a result, anyone within 200 feet of Srihari’s router
can access the Internet free of charge.

Initially, only a couple of Srihari’s neighbors piggyback on his
network. The light use of Srihari’s network has no noticeable
effect on the speed of his Internet connection, leaving him with
plenty of bandwidth. In this case, Srihari’s wireless network most
closely resembles a:

A.  Private good
B.  Common resource
C.  Natural monopoly
D.  Public good
4.2.   After a few months, lots of Srihari’s neighbors get hip to his
unsecured network. As more and more of them piggyback on his
network, they begin crowding bandwidth and Srihari’s Internet
connection speed slows to a crawl.

True or False: With lots of piggybacking neighbors, Srihari’s
wireless network becomes rival in consumption.

True
False
4.3.   Again, Sriahri’s Internet connection speed slows to a crawl as
more and more of his neighbors piggyback on his wireless network,
crowding bandwidth. In the case where the network is unsecured and
congested with lots of piggybackers, it most closely resembles
a:
A.  Private good
B.  Common resource
C.  Natural monopoly
D.  Public good
4.   After a week of painfully slow web browsing, Srihari wises up,
securing his network with password protection.

True or False: Once password protected, Srihari’s network becomes
excludable.

True
False
4.5.   Having solved his piggybacking problems by protecting his
network, Srihari comes up with an idea to get a bit of cash towards
his monthly Internet service bill. He begins collecting a fee from
a few of his neighbors in exchange for his network password.

Between Srihari and a handful of paying neighbors who access his
network, there is plenty of bandwidth to ensure a quick Internet
connection speed. Srihari’s protected wireless network now most
closely resembles a:

A.  Public good
B.  Common resource
C.  Natural monopoly
D.  Private good