10 Questions
What is a characteristic of public goods?
Non-rival in consumption
What is the marginal cost for the first user of a public good?
$200 per unit
Which of the following is an example of a pure public good?
National defense
What is a characteristic of pure private goods?
Rival in consumption
What is the main problem associated with public goods?
The free-rider problem
What is a characteristic of public goods?
Non-rival in consumption
Which of the following is an example of a pure public good?
National defense
What is the marginal cost for the first user of a public good?
$200 per unit
What is a characteristic of pure private goods?
Rival in consumption
What is the main problem associated with public goods?
Free-rider problem
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.
Test your knowledge of public goods with this quiz covering the definition, characteristics, demand, efficient output, and the free-rider problem associated with public goods.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
