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What is a characteristic of public goods?
What is a characteristic of public goods?
- Easily excluded from non-paying consumers
- Low marginal cost for additional consumers
- Non-rival in consumption (correct)
- High marginal cost for additional consumers
What is the marginal cost for the first user of a public good?
What is the marginal cost for the first user of a public good?
- $100 per unit
- $300 per unit
- $0 per unit
- $200 per unit (correct)
Which of the following is an example of a pure public good?
Which of the following is an example of a pure public good?
- National defense (correct)
- Clothing
- Restaurant meals
- Smartphones
What is a characteristic of pure private goods?
What is a characteristic of pure private goods?
What is the main problem associated with public goods?
What is the main problem associated with public goods?
What is a characteristic of public goods?
What is a characteristic of public goods?
Which of the following is an example of a pure public good?
Which of the following is an example of a pure public good?
What is the marginal cost for the first user of a public good?
What is the marginal cost for the first user of a public good?
What is a characteristic of pure private goods?
What is a characteristic of pure private goods?
What is the main problem associated with public goods?
What is the main problem associated with public goods?
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Study Notes
Characteristics of Public Goods
- Non-excludable: Individuals cannot be prevented from using the good.
- Non-rivalrous: Use by one individual does not diminish availability for others.
Marginal Cost for the First User of a Public Good
- The marginal cost is typically zero, as public goods are provided without an individual charge for the first user.
Examples of Pure Public Goods
- National defense is a classic example of a pure public good, as it is available to all citizens without exclusion.
Characteristics of Pure Private Goods
- Excludable: Individuals can be prevented from using the good.
- Rivalrous: Consumption by one individual reduces availability for others.
Main Problems Associated with Public Goods
- Free-rider problem: Individuals may benefit without contributing, leading to under-provision of the good.
Summary of Public Goods
- Public goods are characterized by their ability to be used by multiple individuals simultaneously without cost to others.
- They serve societal needs but often require government intervention for funding and provision due to market failures.
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