Chapter 9: Public goods

What are the characteristics of a private good

Non excludability

Non-rivalry

Non-rejectable

Non-rejectable

Cannot be rejected such as nuclear defence system

Quasi public good

A good that only has some characteristics of a public good

Characteristics of a quasi public good

Semi-non rival

Semi-non excludable

Semi-non rival example

As more consumers are using a park it becomes crowded so less space available for others

Semi-non excludable

It is possible but difficult to exclude non paying consumers

Why are public goods not provided by the private sector

Because the private sector would be unable to supply them for profit

Why should the government provide public goods

Helps prevent under provision and under consumption

Government may provide it more efficiently

Helps provide essential public goods to low income households

Why should the government not provide public goods

If the government becomes a monopoly then lack of competition may cause decrease in efficiency

Public bads

Have negative side effect on people

Examples of public bads

Spread of infectious diseases

Illegal surveillance

Modern slavery

Tragedy of the commons

When individuals acting in their own self interest deplete shared resources

Why does the Tragedy of the commons happen

Due to lack of property rights so the government cannot protect the resource