1. Economics Chapter 3 Section 3:Public Goods and Externalities

2. Private Goods, Public Goods, and in Between
Private goods have two important features:
1. they are rival in consumption
2. suppliers can easily exclude those who don’t pay, so a private good is said to be exclusive.
Thus a private good is both rival and exclusive.

3. Public Goods
Public goods, such as national defense, the Centers for Disease Control, or a neighborhood mosquito-control program, is nonrival in consumption.
Public goods cannot be provided through the market system because of the problem of who would pay for them.
Public goods are both nonrival and nonexclusive.

4. People pay for a public service provided by the local government by paying taxes.
Household that do not pay are called free riders.

5. Quasi-Public Goods Quasi-public goods
Goods that, once produced, are available to all, but nonpayers are easily excluded.
Television shows (Netflix)

6. Open access goods Open access goods
Goods that are rival in consumption but exclusion is costly.
Example: Game fish (in the absence of any regulations, open access goods are overfished, overhunted, or overused).

7. Externalities Negative externalities
By products of production or consumption that impose costs on third parties, neither buyers or sellers.

8. Positive Externalities
By products of consumption or production that benefit third parties, who are not buyers or sellers.