1.3.3 Public goods Flashcards
1
Q
Public goods
A
A good that has non-rivalry and non-excludability characteristics.
2
Q
Non-rival
A
Consumption by one individual does not reduce the availability of the good for others; it is “non-depletable.”
3
Q
Non-excludable
A
It is difficult or costly to prevent individuals from benefiting from the good, regardless of whether they pay for it.
4
Q
Free rider problem
A
Once a public good/service is provided, it is difficult to make people pay for their consumption of it. So there is little financial incentive for firms (private sector) to supply the good.
