LS18 - Public Goods

Question 1

Non Rivalrous

Answer 1

The consumption of a good does not prevent someone else from also consuming the product (a public park)

Question 2

Non Excludable

Answer 2

Once a good is provided, it is impossible to stop others from using the good (flood defences or street lighting)

Question 3

Private Goods

Answer 3

Excludable and Rivalrous

Question 4

Free Rider Problem

Answer 4

The non excludability of public goods means people won’t pay for a good that’s already provided to them.

Question 5

Social Benefit

Answer 5

Private Benefit + Public Benefit

Question 6

Social Cost

Answer 6

Private Cost + Public Cost

Question 7

Positive Externality

Answer 7

External benefits are present and there will be underproduction/underconsumption of the good

Question 8

Negative Externality

Answer 8

External Costs are Present and there will be overproduction/overconsumption of a good or service

Question 9

Merit Goods

Answer 9

Benefit society and generate positive externalities

Question 10

Demerit Goods

Answer 10

Cost society and generate negative externalities