Tuesday, August 28, 2012

Is a public good one in which no one owns the good,and is 2 examples of a public goods water and sand?

Public good is the kind of good which lacks both excludability and rivalry.


Excludability means you can prevent others from using the good. For example, I can block other people from using my pencil because that is a private good under my possession.


Rivalry means your use of the good diminishes other people's use. For example, the fact that I reserve a front seat in the movie theatre means someone else cannot sit in the front row.


An example of public good would be street lamp. You cannot prevent a person from benefitting from the streetlight. You take advantage of the light does not mean other people cannot gain from that good, either.


These traits of public goods often cause some people to become free-riders. Free-riders are those people who benefit without paying any price for it. For example, you cannot prevent an individual from benefitting from national defense.


Remember the key points: non-excludability, non-rivalry, and free-rider problems.

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