3). Public Goods

• What is the free-rider problem?

  
The free-rider problem is when an individual cannot be excluded from consuming a good and thus has no incentive to pay for its provision. As a result, there is no market incentive to provide such a good.
• What is valuation?

  
A method used to determine and estimate the worth of public goods.
• What is a public good?

  A public good is a good or service that is non-excludable and non-rivalrous in consumption, meaning it is available to everyone and one person's use does not diminish its availability to others.
• What is a private good?

  A private good is a good that is both excludable and rivalrous in consumption, meaning its use by an individual stops others from using it whilst its consumption reduces the amount available for consumption by others.
• What is a pure public good?

  They are goods that are completely non-rivalrous and non-excludable. It is impossible to exclude someone from consuming it if they are unwilling to pay for its use e.g. the air we breathe.