1.3.3 Flashcards
What are the two main characteristics of a private good?
Excludable and rival in consumption.
What is excludable as a characteristic of a private good!
When goods are excludable, the owners can exercise property rights
What is rival in consumption as a characteristic of a private good?
One person’s consumption of a product reduces the amount left for other to consume and benefit from
What are the 2 main characteristic of a public good?
Non-excludability
Non-rival in consumption
What is non-excludability as a characteristic of public goods?
The benefits derived from pure public goods cannot be confined solely to those who have paid for it.
What is non-rival in consumption as a characteristic of public goods?
Consumption by one consumer does not restrict consumption by other consumers.
What are examples of public goods?
-Sanitation infrastructure
-Flood defence projects
-Crime control for a community
-Reduced risk of disease from vaccinations
-Freely avaliabke knowledge
-Public service broadcasting
Why are public goods not normally provided by the private sector?
They would be unable to supply them for a profit.
What must the Governemnt do to decide what output of public goods is appropriate for society?
Estimate the net social benefits from making public goods available.
What are the characteristics of a quasi-public good?
Semi-non-rival
Semi-non-excludable
What is an example of semi-non-rival as a characteristic of a quasi-public good?
More consumers using a park or roast do not reduce the space available for others, but beaches can become crowded.
What is an example of semi-non-excludable as a characteristic of a quasi-public good?
It is possible but difficult or costly to exclude non-paying consumers such as fencing a beach/park to exclude non-paying consumers
What are quasi-public goods?
They are a near-public good and can in,y be nin-rival or non-excludable they cannot be both
Why is it difficult to charge someone from using a public good?
They are non-excludable and it is difficult to charge people for benefiting once a product is made available.
Individuals who use a food/service and do not pay as known as what?
Free riders
