Public Goods and Externalities

The video explains the concept of public goods, highlighting their importance in a free market economy. It discusses how public goods like bridges are funded through taxes and the challenges of excluding non-payers. The debate over what should be public goods is explored, using education as an example. The free-rider problem is introduced, illustrating the issues with voluntary contributions for public goods. Externalities, both positive and negative, are explained, showing their impact on society and the economy.

How do public goods contribute to the overall economy?

What are the implications of classifying education as a public good?

In what ways can the private sector generate positive externalities more efficiently than the public sector?