Explain the two characteristics of public goods and explain the significance of each from public provision as opposed to private provision. Include the free-rider problem as it relates to public goods and whether the U.S. border patrol is a public or private good and why.
There are two types of goods that are produced in the market namely private goods and public goods. Private goods are produced through the competitive market system. Examples of private goods are goods that can be found in regular stores. Private goods have two characteristics namely rivalry and excludability (McConnell & Brue, 2008, p. 73). Rivalry means that when one "person buys and consumes a product; it is not available for purchase and consumption by another person" (McConnell & Brue, 2008, p. 73). Excludability on the other hand means that buyers who are willing to pay the market price of a product get the benefit of the product while those who cannot afford the price of the product are excluded from enjoying the benefit of the ...
Characteristics of public goods are explained with significant examples. The solution includes the free-rider problem as it relates to public goods and whether the U.S border patrol is a public or private good and why.