ARE201Lecture13aNotes

ARE201Lecture13aNotes - Lecture 13 Public Goods 1 Thus far...

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Lecture 13: Public Goods 1. Thus far we have been talking about private goods , which are products and services that, once an individual consumes them, their use or consumption is not available to others (examples: if I eat a hamburger, that hamburger is not available for you to eat, or if I wear a shirt, you can't wear that same shirt at the same time) 2. Now we will define public goods. Public goods are products and services that, once available, are available for everyone to use or consume in the same amount, or it is very costly to exclude others from using or consuming them 3. The public good problem: Private businesses won't provide them because there's no profit in it. Once the public good is provided, others can use or consume it even if they didn't share in paying for it (such consumers are called free riders ). 4. The solution: Force everyone to pay for the costs of the public good by taxing them 5. Mosquito example: Residential development with a lake, and mosquitoes breed in the lake.
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