Non Provision Of Public Goods Flashcards
(4 cards)
1
Q
What are public goods?
A
The benefit they provide affects many people rather than one individual
2
Q
What are the characteristics of public goods?
A
Non-rivalrous- this means that consumptio by one person does not limit the consumption by others
Non-excludability- If a good is available to one person it is available to everyone
3
Q
What are examples of public goods?
A
-street lighting
-nuclear defence systems
-national parks
4
Q
What is the free rider problem?
A
Other people will benefit without paying. In such circumstances the market will fail an insufficient number of people will be willing to pay for the product and it will not be profitable for a business to provide it.
