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Public goods tend to be ones that are Non-Rival and Non-Excludable in consumption. Explain what the...

Public goods tend to be ones that are Non-Rival and Non-Excludable in consumption. Explain what the characteristics imply and provide an example of each in your discussion.

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Public good is a good which are non-rival and non-exclusive in nature. Non-rival means consumption of the public good by one person does not reduce its amount available for the other person. For example National defense, public park, street light etc. Non-exclusion means if public good has been provided then it does not possible to exclude one person from consuming it. In fact it will be Pareto inefficient to exclude one person because if that person is allowed to consume then he may be better off but other are not worse off. As a result of non-rival and non-exclusion, property there is problem of free rider and due to free rider market fails.

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