1.3.3 - Public Goods

Question 1

What are Public Goods?

Answer 1

They are non rivalrous - one persons use of the good does not stop another persons.

They are non excludable - meaning you cannot stop someone from accessing the good, and someone cannot chose not to access the good.

Street Light!

Question 2

What is a Quasi Public Good?

Answer 2

Goods which aren’t perfectly non rivarlous and non excludable but aren’t perfectly rival or excludable, like roads (could be a toll or traffic but still often free and people don’t “use up” the roads”)

Question 3

What is the Free Rider Problem?

Answer 3

This says you cannot charge an individual a price for the provision of a non - excludable good because someone else will gain the benefit from it without paying anything.

A free rider is someone who recieves the benefits without paying for it.

Question 4

Why wont private sector producers produce public goods?

Answer 4

Becuase thye cannot be sure of making profit due to the non excludability of public goods. Instead, they are provided by the government and financed through taxation.