1.3.3 Public goods

Question 1

What are public goods and give examples ?

Answer 1

Public goods are goods that are non excludable and non rival. Examples include street lights, parks , road, lighthouses and fireworks

Question 2

What is a non excludable good ?

Answer 2

It is when you cannot exclude others from consuming your good

Question 3

What is a non rival good ?

Answer 3

This is when your consumption of the good does not prevent anyone else from using that good also

Question 4

What is the problem of public goods ?

Answer 4

The free rider problem

Question 5

What is the free rider problem ? and what happens to demand and supply in the market

Answer 5

This is when consumers wait for others to buy and free ride. Therefore no one demands the public good and producers won’t supply public goods as they won’t make a profit

Question 6

What are private goods ?

Answer 6

These are excludable and rival goods