6.3 Public and Private Goods

• **Excludability** means that sellers can prevent consumers from using the goods if they don't pay for them.


  True
• Public goods are those that are non-excludable and non-rival in consumption
• Non-rivalry means that one person's consumption of the good does not diminish the amount available for others
• **Non-excludability** in public goods means it is difficult to prevent people from using the good, even if they don't pay for it.


  True
• Order the steps in comparing private and public goods:

  1️⃣ Define private goods

  2️⃣ Define public goods

  3️⃣ Identify the key characteristics of each

  4️⃣ Compare excludability and rivalry

  5️⃣ Provide examples of each
• Private goods have high excludability, meaning sellers can prevent non-paying consumers from using the goods
• Why does the market often fail to provide an optimal amount of public goods?

  Non-excludability and non-rivalry
• Public goods are non-excludable, meaning it is difficult to prevent people from using them even if they don't pay.


  True
• Match the characteristic with the type of good:

  Excludability ↔️ Private goods

  Non-rivalry ↔️ Public goods
• Excludability in private goods allows sellers to prevent non-paying consumers from using the goods.


  True
• One characteristic of private goods is excludability, which means sellers can prevent non-paying consumers from using the goods
• What are the two defining characteristics of public goods?

  Non-excludability and non-rivalry
• Public goods are characterized by non-excludability, which means it is difficult to prevent people from using the good
• Match the characteristic with the type of good:

  Non-excludability ↔️ Public goods

  Rivalry ↔️ Private goods
• Private goods are excludable and rival in consumption.


  True
• Rivalry in private goods means one person's consumption diminishes the amount available for others
• Private goods are those that are excludable and rival in consumption
• Rivalry means that one person's consumption of a good diminishes the amount available for others
• **Non-excludability** means that it is difficult or impossible to prevent people from using the good, even if they don't pay for it.


  True
• Public goods are non-excludable and non-rival in consumption
• Non-rivalry in public goods means one person's consumption does not diminish the amount available for others
• What are the two defining characteristics of private goods?

  Excludability and rivalry
• Rivalry in private goods means one person's consumption diminishes the amount available for others.


  True
• Excludability in private goods means sellers can prevent non-paying consumers from using the goods
• What is an example of a public good?

  National defense
• Steps to distinguish private goods from public goods based on their characteristics:

  1️⃣ Identify if the good is excludable

  2️⃣ Determine if the good is rival

  3️⃣ Compare the characteristics to the definitions of private and public goods
• What is the defining characteristic of rivalry in private goods?

  Diminishes availability
• Why does the market often fail to allocate public goods efficiently?

  Non-excludability and non-rivalry
• Non-excludability in public goods means it is impossible to prevent people from using the good, even if they don't pay for it.


  True
• Non-rivalry in public goods means one person's consumption does not diminish the amount available for others.


  True
• Why does government intervention often become necessary for public goods?

  Market failure
• What is an example of a non-rival public good?

  Public parks