Public Goods Flashcards
What are the two characteristics of private goods?
1) Rivalrous: Consumption of the good by one makes it unavailable for consumption by another.
2) Excludable: Once provided, it is possible to prevent others from using it.
What is a public good, and what are the two characteristics of public goods?
A public good is a commodity/service provided without profit to everyone in society.
1) Non-rivalrous: The consumption of the good by one does not reduce the amount available for consumption by another.
2) Non-excludable: Once provided, no person can be excluded from benefitting.
What are 3 examples of private goods?
1) Clothes.
2) Food.
3) Footwear.
What are some examples of public goods?
1) Water sanitation.
2) Online knowledge.
3) Public service broadcasting.
4) Street lighting.
5) Policing.
6) Flood defence systems.
Etc.
What is the free rider problem?
The problem of the under provision of public goods, as consumers benefit from them at no financial cost, so few will be willing to pay as public goods are non-rivalrous and non-excludable.
How can the government enforce the payment of public goods (4)?
1) Taxation.
2) Toll roads.
3) Subscriptions.
4) Charging for public toilets.
