Such is the case for the depletion of our Ozone layer and the gradual destruction of our environment via over-fishing, greenhouse gases and climate change. Public goods often suffer from abuse (the ‘ Tragedy of the Commons‘) as nobody is willing to pay the cost for maintaining it, as nobody owns it. As a result, the government tends to provide public goods in order to tackle missing markets for these goods and to improve economic efficiency. Because anyone can access a public good (like traffic lights), nobody is willing to produce it since they cannot reimburse the cost of production. For example, private tuition is a private good. Note that whenever there is a monetary cost to consume a good, it becomes excludable as there are people who cannot access the good. It protects us from harmful radioactive rays from the Sun that can cause cancer (giving us utility), and anyone can benefit/access it (non-excludable) without taking away the opportunity for others to do so (non-rivalrous). The Ozone layer in our atmosphere, for example, is a public good. Instead, a public good is something that is freely usable by anyone, without cost and exclusion, and does not reduce in quantity available when used. In Economics, a public good does not mean something is under public ownership. Public Goods & the Free-Rider Problem Explanation:
A private good is defined as a good which is excludable and rivalrous.A good in Economics is defined as anything which humans can derive utility from.A quasi-public good is a good which is non-excludable but rivalrous or excludable but non-rivalrous.A good is non-excludable if anyone can use or access it, without monetary payment.A good is non-rivalrous if the consumption/use of it will not decrease the possibility of others doing so.A public good is defined as a good which is non-excludable and non-rivalrous.
Relevant Exam Boards: A-Level (Edexcel, OCR, AQA, Eduqas, WJEC), IB, IAL, CIEĮdexcel Economics Notes Directory | AQA Economics Notes Directory | IB Economics Notes Directory Economics Personal Statement Guidelines.
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