T8 - Private, Publci and Quassi Pulic goods Flashcards
What is a public good
A good which is non excludeable and non rivalrous
What does no excludeable mean
People cannot be excluded from using shit
What does non rivalrous mean
Me usign it doesnt deplete the availability fo rothers
Give examples of pure public goods
Flood control sysems
Broadcasting services
Water supply
Street lighting
Lighthouse protection
National Defense
What are pure public goods also known as
Collectiev consumptin goods
Why si a public good underprovided in a free market
Due to there beign non rivalry and non excludability there is no incerive to pay (firms have diffciulty chargign consumers for use)
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What si the free rider problem
Individuals have an icnetive to use a good without contributing to the cost of buying it
Why do public goods cosntutite to a MF
Little or no incentive to provide. Miss allocated resources
What is a Quassi public good
Non pure public good
WHere the good is not fully non rival and peopel can eb excluded from consumign the good
Examples of quassi goods
TV Lisences
Roads
public transport
parks]libraries
When is teh opitmal leveel of output for public and quassi goods
When they are availabel free of charge, providing there is no capacity constraint
What are private goods
There is exculdability
There is rivalry
When peopel dont pay for a good due to the free rider problem what happens
No good is provided
There will eb social ineffcieny
Gov need to pay for it out of general taxation
Should the gov provide public goods
Yes due to non rival nature
Yes - Can be fudned via tax
YEs - helps under provision
Yes - they can achieve eco of scale more effcinety
Yes - helps keep prices lower
Why should the gov not provide public goods
They can becoem a monopoly provider, and due to a lak of comeptions lose efficiency
