8.3 Private Goods Public Goods And Quasi-public Goods

Question 1

what is a private good?

Answer 1

a good that is exludable and rival

e.g an orange

Question 2

what is an excludable good?

Answer 2

people who unprepared to pay can be excluded from benefiting from the good

Question 3

what is a rival good?

Answer 3

when one person consumes a good, the quantity avaliable to others diminishes

Question 4

what is a non-excludable good?

Answer 4

good where someone can’t be prevented from having it(no competition)

Question 5

what is a non-rival good?

Answer 5

a good where one person using the good does not diminish the supply(no competition)

Question 6

what is rivalry often reffered to as and why?

Answer 6

diminishability-when one person consumes the good the quantity avaliable to other people diminishes

Question 7

what is a public good?

Answer 7

good that is non-excludable and non-rival
and non-diminishable
e.g a radio programme

Question 8

what characteristics of a public good lead the market to failure?

Answer 8

it being non-excludable and non-rival(no profits are made)-problem of missing markets

Question 9

what are some examples of public goods?

Answer 9

air,sea,police, london fire brigade

Question 10

what is the free rider problem?

Answer 10

non payers who enjoy the benfits on consumption of the good

Question 11

why are the free riders able to enjoy public goods?

Answer 11

because they are non excludable

Question 12

if a public good charged money for its use, what is the issue that would make it impossible to collect enough revenue to cover costs?

Answer 12

because the good is non-excludable

Question 13

why is healthcare not a public good?

Answer 13

it has characteritics of a private good, e.g its rival and excludable in consumption

Question 14

is national defence a public good?

Answer 14

yes

Question 15

what would happen if everyone freerided on the Nuclear defence service?

Answer 15

it would make a loss and its incentive to provide a service in the market disappears-resulting in a missing market(market failure)

Question 16

goods vs bads
what is a good?

Answer 16

something that provides benfit to the person cosnuming it.

-bread causing utility or pleasure
(increases economic welfare)

Question 17

goods vs bads

what is a bad?

Answer 17

something that yeilds disatisfaction or displeasure
(reduces economic welfare)

e.g consumption of rotten meat

Question 18

what a ‘public bad’

Answer 18

(opposite of public good)
e.g rubbish or garbage

-leads to the freerider problem-people can avoid paying for their rubbish to be removed by dumping it in a public place(although most people wouldn’t do this)

Question 19

what is a quasi-public good?

Answer 19

a partially public and partially private good(non fully non-rival and where it is possible to exclude people from consuming a products)

Question 20

are most public goods pure public goods or quasi-public goods?

Answer 20

quasi-public goods(e.g light houses and tv)

Question 21

why would markets turn pure public goods to quasi-public goods?

Answer 21

to get rid of the free-riders

Question 22

when does the optimum level of consumption occur for public goods?

Answer 22

when they are free

Question 23

can quasi-piblic goods be provided by the markets and essentially make money?

Answer 23

yes

Question 24

use roads as an example, how does technilogical change a public good to a quasi-public good?

Answer 24

technolgical change makes it feasable for the gov to charge all motorists for use and this can be varied throughout the day to create incentives for drivers to shift their patterns

Question 25

why would you let public goods be free

Answer 25

they are non-diminishing so it would allow as much consumption as possible