Explain how private goods can be protected with the protection of public goods in 150 words
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By the end of this section, you will be able to:
Identify a public good using nonexcludable and nonrivalrous as criteria
Explain the free rider problem
Identify several sources of public goods
Even though new technology creates positive externalities so that perhaps one-third or one-half of the social benefit of new inventions spills over to others, the inventor still receives some private return. What about a situation where the positive externalities are so extensive that private firms could not expect to receive any of the social benefit? This kind of good is called a public good. Spending on national defense is a good example of a public good. Let’s begin by defining the characteristics of a public good and discussing why these characteristics make it difficult for private firms to supply public goods. Then we will see how government may step in to address the issue.
Identify a public good using nonexcludable and nonrivalrous as criteria
Explain the free rider problem
Identify several sources of public goods
Even though new technology creates positive externalities so that perhaps one-third or one-half of the social benefit of new inventions spills over to others, the inventor still receives some private return. What about a situation where the positive externalities are so extensive that private firms could not expect to receive any of the social benefit? This kind of good is called a public good. Spending on national defense is a good example of a public good. Let’s begin by defining the characteristics of a public good and discussing why these characteristics make it difficult for private firms to supply public goods. Then we will see how government may step in to address the issue.
shibu72tharani:
national defence is a public good? Or it can use for public?
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