3.1.5.3 and 4.1.8.3 Public goods, private goods and quasi-public goods

Zero marginal cost of supply

• Free Goods
• Economic Goods

air and sea water are naturally in abundant supply

• Free Goods
• Economic Goods

have a degree of scarcity

• Economic Goods
• Free Goods

cannot be traded

• Free Goods
• Economic Goods

scarce in relation to its demand, so people will pay (or barter) for it.

• Economic Goods
• Free Goods

scarce in relation to its demand, so people will pay (or barter) for it.

• Economic Goods
• Free Goods

solar energy in a sunny country

• Free good
• economic good

Goods provided by the government

• economic good
• Free good

free market ... such as national defence, street lighting and flood control systems.

• fails to supply public goods
• fails to supply private goods

public goods are funded by ...

• tax payers
• government