2 pages/≈550 words
Public Goods and Private Goods: Economic essay (Essay Sample)
List any five private goods and any five public goods. Do not include goods that we have discussed in this course, or that you have read about in the textbook. Then, do the following: -Analyze the characteristics of each of these goods. Focus on the characteristics that define each good as "public" or "private." -Based on the characteristics of each good, argue whether the price elasticity of each of these goods would be relatively more elastic or less elastic. Give the basis of your reasoning. source..
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Public Goods and Private Goods
There are two major types of goods in an economy: public goods and private goods. Public goods are almost free for all and non-excludable meaning that there can be a hard time separating payers from non-payers who enjoy the use of the good. Private goods on the other hand are mostly for profit and are completely excludable. Examples of public goods are: street lighting for highways, free-to-air television or radio, national security and public parks or beaches. Private goods include: a loaf of bread, a fancy gadget like The Kindle, Pay per view television, bus rides and movie tickets (Olson & Olson, 2009).
The public goods are often characterized by free rider problems in that the user does not necessarily pay to consume the good in any way. Similarly the paying user, if any, cannot be differentiated or separated from the non-paying because the use of one good by one user does not necessarily affect the use of the same good by another user. Take for example street lighting on a highway. The light is there to light up the street. It is almost ent...
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