Question

Explain why the health care system and education system can be consider as both public and private goods. What features or characteristics of public and private good does the system satisfaying or not?

Answer 1

A private good is the opposite of a public good. Public goods are generally open for all to use and consumption by one party does not deter another party's ability to use it. It is also not excludable; preventing the use of the good by another is not possible. Many public goods can be consumed at no cost

1. ublic goods are produced by the government or by nature for the welfare of the people without any cost. But private products are the ones manufactured and sold by private companies to earn a profit.
2. When nature or the government provides public goods, private goods are produced by the businessmen or the entrepreneurs.
3. In the case of public goods, rich or poor can equally benefit from such goods. Whereas, in fact of private products, only rich people who have the purchasing power can relish its benefits.
4. The former is readily available and accessible by all the public. However, the latter diminishes with the consumption of each unit by the consumers.
5. The quality of public goods remains constant for all consumers. But, the quality of private goods vary as per the purchasing power, i.e. more purchasing power means a better quality of the product.
6. Public goods are a social choice, i.e. it aims at benefiting society as a whole. Whereas, private products is a consumer’s preference and decision-based on individual needs.
7. The primary objective of the former is the growth and development of the country; however, the latter aims at profit earning by the entrepreneurs.
8. Public goods cannot be traded in the free market, whereas private products are sold in the open market only.
9. When public goods have no opportunity cost, private goods have an opportunity cost where the person choose one product over the other.
10. Public goods are available to even those who did not pay any tax known as free-riders, whereas the same is not the case in private products.
11. The former is non-rival, i.e. it is available and can be used equally by all the public at the same time. However, the latter is rival and cannot be used by the two or more people simultaneously.
12. Public goods do not discriminate or restrict people by the buying capacity; these are freely assessable by all. On the contrary, private goods are excludable and prevent its consumption by the people who don’t have purchasing power.
13. The demand curve for public goods is horizontal, whereas the demand curve for private products is vertical.
14. The various examples of public goods are police service, fire brigade, national defence, public transport, roads, dams and river. On the contrary, clothes, cosmetics, footwear, cars, electronic products and food are examples of private goods.

Both the goods, public and private are essential for the development of a country.

Public goods are a necessity to provide the essential amenities to the people for improving the quality of life.

Private goods are equally essential to meet the consumer needs and requirements, enhance the trade activities in a country and promote economic development.