Micro 20 - Public goods Flashcards
define public goods?
Non- excludable and they have non-rivalry in consumption
Define private goods?
Goods with excludability and rivalry.
What does non-excludable mean?
you cant stop someone from connsuming this good.
Eg:
- streetlight.
- flood control systems (Thames barrier).
- fresh air.
- national defence.
what does non-rivalry mean?
Consumption of the good by one person doesn’t diminish the benefit to another person.
Eg:
- Street light.
What does non-rejectable mean?
you cant choose not to consume the good.
what is the free rider problem?
Where no individuals are willing to pay to consume the good.
Why does the free rider problem occur?
Because individuals know they cannot be excluded from consuming that good, they choose not to pay. Economics calls this a missing market, which is an example of complete market failure.
What are quasi-public goods?
Since very few goods are pure public goods, the most common type of goods are called quasi-public goods. These goods have some characteristics of pure public goods (semi-rivalry or semi-excludable) or only have one characteristic.
what are some examples of quasi-public goods?
The beach - it might be full sometimes so there may be rivalry.
The M25 (motorway) -there might be traffic so there is rivalry to an extent.
What is public service broadcasting in the UK?
broadcasting intended to benefit the public.
what is the duty of communication regulators (OFCOM)?
maintain impartiality, deliver trusted new and act responsively.
