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What is a 'Public Good'




While public goods are important for a functioning society, there is an issue that arises when these goods are provided, called the free-rider problem. This problem arises because a rational person will not contribute to the provision of a public good since he or she does not need to contribute to benefit. For example, if a person does not pay his taxes, he still benefits from the government's provision of national defense by free riding on the tax payments of his fellow citizens.

Characteristics of Public Goods



Characteristics of Quasi-Public Goods

Quasi-public goods are goods and services that have characteristics of being nonrivalrous and nonexcludable, but are not pure public goods. Roads are a good example of a quasi-public good. All infrastructure is built for the benefit of the public, but as more of the public uses the infrastructure, it creates traffic and congestion, lowering the value of the good.

  1. Consumer Goods

    Consumer goods are the products purchased by the average consumer. ...
  2. Free Rider Problem

    The free rider problem is an issue that occurs when some people ...
  3. Normal Good

    A normal good is one whose demand increases when people's incomes ...
  4. Income Effect

    The income effect is the change in demand for a good or service ...
  5. Intermediate Good

    An intermediate good is a good or service used in the eventual ...
  6. Social Good

    A social good is an act that benefits the largest number of people ...
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