Chapter 3 section 3 Public Goods and Externalities

1. Chapter 3 section 3 Public Goods and Externalities Private goods- 2 features • The amount consumed by one person is unavailable to others • Nonpayers can easily be excluded

2. Public goods • National defense, the Centers for Disease Control, mosquito-control program, it is non-rival. • Public goods are are both rival and non rival.

3. Quasi-Public Goods • Television of private and public goods • Quasi-public goods-TV signal is nonrival but exclusive, Goods that are nonrival but exclusive are called Quasi-public goods.

4. Open-Access Goods • Some goods are rival but nonexclusive. • Fishing and migratory game are nonexclusive in that it would be costly or impossible for a private firm to prevent access to the goods. • Goods that are rival buy nonexclusive are called Open-access goods.

5. Externalities • Negative externalities-by-products of production or consumption that impose costs on third parties, neither buyers nor sellers. • Ex. Aerosol spray cans (Chlorofluorocarbons deteriorates the ozone layer causing Global warming. • Positive externalities-by products of consumption or production that benefits third parties, who are not buyers or sellers. • Ex. Vaccinations reduce the likelihood of contracting the disease. Reduce the risk of transmitting the disease to other.

6. Education • Positive externalities • Society receives external benefits from education • Better citizens • Can read road signs • More productive workers, able to support themselves & families • Less likely to require public assistance or crime for income. • Government provides free education for primary & secondary education. • Require students to stay in school until 16 yrs old.