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What do you mean by Public Goods
These are the goods that are characterized by non-rival consumption and which do not have the capacity to exclude the non-tax payers. There are four types of goods, of which the public good forms a part.
The other three would be private goods, the common property, and the near public goods. They have minor differences in each of them. Contact us now for Public Goods Homework Help
The public goods are those that do not have the proper rights for the property. They are actually owned by all. This works well as each and every member of the society can make use of it. There are no restrictions to be seen at all.
These are goods that cannot be exchanged with any other good in the market. The best way to provide these goods is by the government. There is no other good way to provide these public goods.
Example for Public Goods
There area number of examples that can be quoted. The best among them would be the national defense. In this case, there are also non-taxpayers who are benefited from this.
This can be felt when they are protecting all of us from foreign attacks. They do not make you pay exclusively for it. All the public sectors fall under the public goods category.
What Is The Free Rider Issue
There is one issue that arises in the case of public goods. This would be the reason why it would be best on the part of the government to provide these goods for the public.
This would be the problem of free riders. These public goods are provided to the public for free, but there is a cost involved in the production of these goods too. There are not many people who would willingly pay if a good is given for free.
Hence the government would need money to produce it. This is collected by the government through taxes. When the usage of the free-rider goods is seen, it has to be noted that not only the taxpayers use it, but also the non-taxpayers are seen to use it. This way everyone gets a free ride. This is why the name was given.
In case the private sector tries to provide these goods which are already available for free to the people, then no one would want to buy it at a price. This is the reason why the good which is a public good is not produced by any other firm in the industry.