1.3.3: Public Goods

Question 1

What are public goods?

Answer 1

• These are goods are commodities or services that every member of a society can use without reducing availability to others

Question 2

What are the two key characteristics of public goods?

Answer 2

• Non rivalrous: one person’s use of the good doesn’t stop someone else using it
• Non-excludable: you cannot stop someone from accessing the good and someone cannot choose not to access the good

Question 3

What are quasi- public goods?

Answer 3

• Goods which aren’t perfectly non-rivalrous and non-excludable but aren’t perfectly rivalrous and excludable
  eg roads; there could be tolls and semi-rivalry as people don’t ‘use up’ the roads but congestion causes problems during rush hour

Question 4

What does the free rider problem state?

Answer 4

• States tat one cannot be charged an individual price for the provision of a non-excludable good because someone else will gain the benefit from it without paying anything.