Public Goods Flashcards
1
Q
Public Goods
A
Goods that have no rivalry and no exclusion (ex: education, park)
2
Q
What is the main problem with public goods?
A
The Free Rider Problem: Public Goods have no profit
3
Q
Free Rider Problem
A
When people take advantage of using common resource without paying for it (taxes); Large reason why government provides public good; Too little is provided
4
Q
How much should governments produce?
A
Take vertical sum; What I am willing to pay plus what someone else it willing to
5
Q
Common Resources
A
Mix of public and private; Rivalry but no exclusion; Ex: Oil
6
Q
What is the problem with common resources?
A
Overconsumption
