Understanding Public Goods and Market Failure

The video tutorial explains public goods, their characteristics, and how they differ from private goods. It discusses the issues of market failure due to free riders and the concept of missing markets. The video also covers non-pure public goods and provides examples like toll roads and busy beaches. Finally, it highlights government intervention as a solution to market failure through state provision of public goods.

What is a key characteristic of private goods?

• Infinite availability

• Non-excludability

• Non-rivalry

• Excludability

Why is pizza considered a private good?

• It is non-excludable and non-rival

• It is excludable and rival

• It is excludable and non-rival

• It is non-excludable and rival

Which of the following is an example of a public good?

• Pizza

• Lighthouse

• Private army

• Toll road

What problem do free riders cause in the context of public goods?

• They increase the supply of public goods

• They lead to market failure

• They ensure everyone pays for public goods

• They make public goods rival

How do free riders affect the provision of a private army?

• They have no effect on the army

• They reduce the army's profits

• They make the army more efficient

• They increase the army's profits

What is a non-pure public good?

• A good that is both excludable and rival

• A good that is always provided by the government

• A good that is neither excludable nor rival

• A good that is either excludable or rival, but not both

Which of the following is an example of a non-pure public good?

• Public park

• Toll road

• Streetlight

• Lighthouse

What is the typical solution to market failure caused by public goods?

• Higher prices

• Increased competition

• State provision

• Private provision

Why do governments provide public goods like streetlights?

• Because they are profitable

• Because they are non-excludable and non-rival

• Because they are rival

• Because they are excludable

Which of the following is NOT a reason for state provision of public goods?

• To increase private profits

• To address missing markets

• To prevent market failure

• To ensure universal access