Public goods are really cool when we study microeconomics!
They have two main features: non-excludable and non-rivalrous.
Let’s break that down:
Non-Excludable: This means that once a public good is available, everyone can use it. For example, think about streetlights. When they’re on, everyone benefits, even if they didn’t pay for them! This makes it hard for companies to sell these goods, because they can’t easily charge people who use them.
Non-Rivalrous: This means that when one person uses the good, it doesn’t take away from someone else’s ability to use it. For instance, when someone enjoys a peaceful day in a public park, it doesn’t stop others from enjoying it too.
Because of these features, we can run into something called market failure. Since businesses can't make money from public goods, they often provide less than what people need. This can lead to problems like public services not getting enough money!
In short, knowing about public goods helps us understand why we need government help and careful planning to manage them.
Public goods are really cool when we study microeconomics!
They have two main features: non-excludable and non-rivalrous.
Let’s break that down:
Non-Excludable: This means that once a public good is available, everyone can use it. For example, think about streetlights. When they’re on, everyone benefits, even if they didn’t pay for them! This makes it hard for companies to sell these goods, because they can’t easily charge people who use them.
Non-Rivalrous: This means that when one person uses the good, it doesn’t take away from someone else’s ability to use it. For instance, when someone enjoys a peaceful day in a public park, it doesn’t stop others from enjoying it too.
Because of these features, we can run into something called market failure. Since businesses can't make money from public goods, they often provide less than what people need. This can lead to problems like public services not getting enough money!
In short, knowing about public goods helps us understand why we need government help and careful planning to manage them.