Chapter 17, Problem aWYWL

To determine

Difference between public good and private good.

Explanation of Solution

Public Good:

The good that can be used by everyone simultaneously without reducing the supply for the others. Everybody can use it even if they do not pay for it. So a pure public good is Non rival and non excludable.

Private Good:

The good that cannot be used by everyone simultaneously without reducing the supply for the others. Only the people who pay for it can use it. Others cannot. So a pure public good is rival and excludable.

Difference between Public Good and Private Good

Public Good	Private Good
Public good is non Rival	Private Good is Rival
Public Good is non excludable	Private Good is excludable
Free rider problem exist	Free rider problem does not exist

Economics Concept Introduction

Concept introduction:

Public Good:

The good that can be used by everyone simultaneously without reducing the supply for the others. Everybody can use it even if they do not pay for it. So a pure public good is Non rival and non excludable. Ex- defense, clean air

Private Good:

The good that cannot be used by everyone simultaneously without reducing the supply for the others. Only the people who pay for it can use it. Others cannot. So a pure public good is rival and excludable.