Public Goods Flashcards
What are features of pure public goods
Non excludable
Non rival
What does non excludable mean? Why?
No price can be charged for the good
Some people can gain benefit from products others have bought
May be no effective way of pricing
What does non rival mean?
The quantity of good doesn’t diminish upon consumption
Examples of pure public goods
Flood defences
Road signs
Street lights
Roads
Beaches
What is the free rider problem
Individuals have the incentive not to contribute towards the provision of the public good as they’ll wait and free ride
Benefit without paying and receive same amount
Why may there be missing markets
Free rider - no one paying for provision of public goods
No private motive to supply them
None supplied as a result
What are quasi public goods
Is a public good that sometimes shows characteristics of a public good but can show characteristics of private goods
Examples of quasi public goods
Roads
Beaches
