What are “public goods”? Pick a government good/service that you consume, define what makes it a public good (how is its non-rival and non-excludable). As we discussed in class, the existence of externalities creates an efficiency problem in the provision of these goods and services. Unlike the private sector, State and Local Governments can intervene. Using the example of the public good, you have provided, please provide an example of an externality that will impact its provision, and detail how a government could/should intervene.

Answered: What are “public goods”? Pick a…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section: Chapter Questions

Problem 1PA

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What are “public goods”? Pick a government good/service that you consume, define what makes it a public good (how is its non-rival and non-excludable). As we discussed in class, the existence of externalities creates an efficiency problem in the provision of these goods and services. Unlike the private sector, State and Local Governments can intervene. Using the example of the public good, you have provided, please provide an example of an externality that will impact its provision, and detail how a government could/should intervene.

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Public Goods: It refers to those goods that are generally regulated by the government for all members of the society. For example, law enforcement, defense etc.

Public goods have two characteristics:

Nonexcludable: It means those public goods that can be consumed by all the members of the society. These goods do not discriminate the members of the society, all members are equal and cannot be excluded.
Non-rivalrous: It refers to accessibility and availability of goods. It means these are easily accessible so, every can have them and these goods never deplete in near future so, these are available in future. In other words, the consumption of one consumer cannot deplete these goods.

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