5.3 Micro Flashcards
What are public goods?
Non- rival goods
Non-excludable goods
What are non-rival goods?
Where consumption of the good does not reduce the amount available for consumption for others
What are non-excludable goods?
Where, once provided, it is impossible to stop other individuals from using them
What can public goods have?
Positive and negative externalities
What is a free rider?
Someone who benefits from a good or service without paying for it
When is the government likely to intervene?
When there is little incentive for firms to supply goods and services
How are public goods categorised?
Non-excludable and non-rival
What are public goods an example of?
Complete market failure
What are the categories of private goods?
Rival goods
Excludable
What are rival goods?
Where consumption of the good impacts the amount available to consume for others
What are excludable goods?
It is possible for to stop other individuals from using them
Can there be free riders with private goods?
No, non payers can be excluded from the consumption of private goods
What are quasi goods?
Public goods that possess some but not all characteristics of public goods
Partially excludable or partially rival
E.g. roads
