1.3.3 Public Goods ✅

Question 1

What are the factors of a public good?

Answer 1

Non-excludability and non-rivalry.

Question 2

Give example of public goods?

Answer 2

Street lighting
National Defense
Sea defence

Question 3

Where can public goods not be provided and why?

Answer 3

Private sector as it would result in a missing market due to free riding which puts off suppliers (have profit initiatives).

Question 4

What is free-riding?

Answer 4

Consumers realise they can consume the good without paying for it.

Question 5

What does free riding cause?

Answer 5

Private firms to be unmotivated to produce causing under provision and market failure.

Question 6

Will private firms supple quasi goods?

Answer 6

Yes as profit can be made from them. However price incentive means the prices tend to be high therefore there is under consumption.

Question 7

What is a quasi good? Example?

Answer 7

A good that shares many of both public and private good characteristics. Typically non exclusive and semi rival.
Roads = semi-excludable w tolls and semi-rivilrous as people don’t “use up” the roads but come soon is an issue.