PUBLIC GOODS

Question 1

What is a public good

Answer 1

goods provided by teh governemnt

and not through market mechanisms themselves

where we directly pay for them

Question 2

give examples of public goods

Answer 2

streetlights

flood defences

Army

Question 3

what are the 2 fundamental characteristics of public goods

Answer 3

non excludable

non rival

Question 4

what does non excludable mean

Answer 4

no price can be charged for the good

Question 5

what does non rival mean

Answer 5

qunatity available doesnt diminish upon consumption

Question 6

give 1st explanation for why price cant be charged for a public good

Answer 6

benefits of consuiming good cannot just be confined to the individual that has paid for it

even if someone pays people around might benefit in the same way for free

Question 7

give 2nd explanation for why price cant be charged for a public good

Answer 7

no price can be charged as theres not a cost efficient way of pricing e.g might be too expensive

Question 8

explain non rivalry using example of chocolatge

Answer 8

if we consume choocolate theres one less that availabel for everyone else

not like pg if someone consumes it the wuantity available stays the same for all esle who wanna consume

Question 9

explain why streetlights are aprivate good

3 points

Answer 9

non excludable as when someone pays teh benefits arent confided to th eperson that pays as everyone can make use of the streetlight

non ecludable as theres no cost effective way to price the streetlight as would be too expensive for the average consuemr

non rival as wehen consumed the quantity avaiable o streetlgith doesnt dimininsh for everyone else

• one person using it doesnt reduce amount available for others

Question 10

in a beach theres no cost efficient way to PRICE FOR ALL

Answer 10

water, sand and leisure it provides

Question 11

theres no cost efficient way to price beahces for all the leisure it provides but in theory what could private firms do

Answer 11

build walls so people have to pay

Question 12

do to non excludability and non rivalry what do we get

Answer 12

free rider problem

Question 13

explain the free rider problem

2 marks

Answer 13

consumers got 0 incentive to contribute to provision of public goods

because non rival and non excludable so wait for others to contribute then free ride off their contributions

Question 14

why do free riders know they can cause the free rider problem

Answer 14

beenfits of PG not confined to person thats paying so can beenfit w/o paying - non excludable

and know if person paying , does consume the same amount is available for them to consume also - non rival

Question 15

if everyone acts liek a free rider what would happen:

no one would …

Answer 15

no one would pay towards provision of PG at all

Question 16

if free rider problem means no one would pay towards the provision of PG at all what does this mean for the mkt

Answer 16

if theres no contributions =

no chance of making profit =

no private motive to supply in the free mkt =

0 supply =

missing mkt

Question 17

explain why a missing market is so deep

Answer 17

complete and worst kind of mkt failure as there’s

high demand for these v socially desirable goods but there’s no supply

Question 18

if we agree w conclusion of free rider problem and missing mkt whats the only solution

Answer 18

gov to provide through tax revenue

Question 19

how could we evaluate the idea only solution is for gov to privide through tax revenue

Answer 19

find unique ways of agreeing for private provision

through looking at notion of quasi public goods

Question 20

what is a quasi public good

Answer 20

public is a good that shows characteristics of a public good (non excludable/rival)

and shows characteristics of a private good ( excludable and rival)

Question 21

good examples of quasi public goods

Answer 21

roads and beaches

Question 22

how can roads be excludable

full explanation pls + 3 points

Answer 22

toll roads

not most efficient but possible esp with tech improving it

as dont have to be physical booth but camera that scan plates and can gain rev that way

Question 23

how can roads be rival

Answer 23

at peak/congestion time road space diminishes upon consumption as when cars take up space theres less space for others

Question 24

argue beahces are a quasi publci good first through exludability

Answer 24

hotel could own a beach and only allows those that paid for the hotel to use it - price is being charged through cost efficient way (check?)

Question 25

argue beaches are a quasi publci good

first through rival

finish em sis 2 points - last one is a ko

Answer 25

at peak/congestion times e.g summer holidays one person using it reduces availabliltyof space for to others if its massivley packed

therfore private provision takes place rather than going to the gov

Question 26

what topic/modern day conept is important to add

Answer 26

role of tech

Question 27

explian why role of tech is so important in this toppic

2 points

create

therefore

Answer 27

creates csot effctive ways to price [as need less labour and phsical ]

therefore public goods are no longer pure but maybe private goods