Question

2. Explain the difference between a private good and a public good. Why has there been an increase in the number of public goods "produced" by governments?

Answer 1

The difference between the Private good and Public goods are rivalrous and excludability. The public goods are non-excludable i.e. no one can be excluded from using the public goods, for example, national defense. No one can be excluded by using a benefit of national defense. The second thing which differentiates the two type of goods is rivalrous. The public goods are non-rivalrous i.e. if one person uses a public good the good doesn't get reduced for the use of other. For example, a road.

Government produces more and more public good because the benefit of the public good can be enjoyed by all the citizen equally. If they produce private good it will be limited to use of a certain number of people. The more the government produces the public good more benefit they can do for the people.