Public Goods

Public Goods

Goods and services that are non-rivalrous and non-excludable, allowing consumption by additional consumers without diminishing others' enjoyment.

Quasi-public good

Exhibits characteristics of both private and public goods, like a crowded public beach.

Free-rider problem

Arises due to non-excludability of public goods, where individuals benefit without paying, leading to under-allocation of resources.

Gov Intervention

Government provides public goods through direct provision or contracting out to address underproduction issues.

Direct Provision

Government directly supplies goods and services to the public, overcoming market failures and improving societal well-being.

Contracting out

Government hires private producers to create public goods, aiming for cost-efficiency and access to specialized skills, but facing challenges like loss of control and monitoring costs.