Question
Download Solution PDFGovernment goods and services that aren't sold directly to the consumers, for example defence goods, roads are categorised under:
Answer (Detailed Solution Below)
Detailed Solution
Download Solution PDFKey Points
- Public Good:
- Public goods are goods that are commonly available to all people within a society or community and that possess two specific qualities: they are non-excludable and non-rivalrous. Everyone has access to use them, and their use does not deplete their availability for future use.
- A commodity whose benefits are indivisibly spread among the entire community.
- Non-excludability - Individuals or groups of individuals can’t be specifically excluded from using the goods
- Non-rivalry - The use of the goods by some individuals doesn’t cause a reduction in their availability to others, which would thereby violate the first quality
- Public goods are generally considered goods that are available to anyone.
- They differ from common goods in that the latter are typically non-excludable but are usually rivalrous to some extent.
- Wild game used for food is an example of a common good.
Additional Information
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- People cannot generally be excluded from obtaining and using it; however, the same animals cannot be used more than once.
- The list of public goods varies, depending on how specifically the term is viewed. However, common examples of public goods include:
- Street lighting - It is generally provided by communities and consumption/use of the lighting doesn’t prevent others from using it as well.
- Emergency services - They are provided to communities, and their use benefits and strengthens the community.
- National defense - Whether paid or voluntary, national defense services protect the country as a whole.
Last updated on Jun 12, 2025
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