1.3.3 - Public Goods

Question 1

What Are Private Goods?

Answer 1

~ Are goods which firms are able to provide to generate profits.
~ They are excludable and rivalrous.

Question 2

What Are Public Goods?

Answer 2

Are goods that are beneficial to society, but are missing from the free market as firms will not provide the goods due to the principles of non-excludability and non-rivalry.

Question 3

What Are The 2 Features Of Public Goods?

Answer 3

~ Non-excludable.
~ Non-rival.

Question 4

What Does Non-Excludable Mean?

Answer 4

You cannot stop someone from accessing the good and someone cannot choose not to access the good.

Question 5

What Does Non-Rivalrous Mean?

Answer 5

One persons use of the good doesn’t stop someone else from using it.

Question 6

What Is The Free Rider Problem?

Answer 6

Individuals won’t pay for a public good and will instead wait for someone else to.