Public Goods
Definition
Public goods are goods or services that are non-exclusionary and non-rivalrous, meaning they are available to everyone and one person's consumption does not diminish the availability for others.
Analogy
Public goods are like a fireworks display in a park. Once the fireworks start, anyone in the vicinity can enjoy them without being excluded, and one person's enjoyment of the fireworks doesn't take away from another person's enjoyment.
Related terms
Non-Exclusionary: Non-exclusionary refers to goods or services that cannot be restricted from use by individuals. For example, public parks are non-exclusionary because anyone can enter and use them freely.
Non-Rivalrous: Non-rivalrous refers to goods or services where one person's consumption does not reduce its availability for others. An example is national defense - if one person is protected by it, it doesn't mean there is less protection available for others.
Free Rider Problem: The free rider problem occurs when individuals benefit from a public good without contributing towards its provision. It arises because people can enjoy the benefits of a public good even if they don't pay for it directly.
"Public Goods" appears in:
Study guides (1)
Additional resources (2)
Practice Questions (2)
- Why do public goods tend to be underprovided in the absence of government intervention?
- How does the free-rider problem impact the provision of public goods?
Resources
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