Question

Please describe public goods briefly and talk about why their provision is problematic

Answer 1

Public goods are the goods that are non excludable and non rivalrous in nature. Non excludable means that it is available for all and no one can exclude others from having it. Non rivalrous means that use of it by one individual does not reduce its availibility for others. Thus public goods are available to all in non excludable and non rivalrous manner.

Public goods is generally supplied by the government from the tax revenue collected by them and it is provided for the whole society. Goods like public parks, national defense comes under the category of public goods.

There are main problem associated with providing public goods to all is free rider's problem. Under this even people who don't pay for it get the advantage of public good free of cost and its very difficult to recognize these free riders out of the whole society.