Chapter 3 section 3 Public Goods and Externalities Private goods- 2 features 1. The amount consumed by one person is unavailable to others 2. Nonpayers can easily be excluded

Public goods National defense, the Centers for Disease Control, mosquito-control program, it is non-rival. National defense, the Centers for Disease Control, mosquito-control program, it is non-rival. Public goods are are both rival and non rival. Public goods are are both rival and non rival.

Quasi-Public Goods Television of private and public goods Television of private and public goods Quasi-public goods-TV signal is nonrival but exclusive, Goods that are nonrival but exclusive are called Quasi-public goods. Quasi-public goods-TV signal is nonrival but exclusive, Goods that are nonrival but exclusive are called Quasi-public goods.

Open-Access Goods Some goods are rival but nonexclusive. Some goods are rival but nonexclusive. Fishing and migratory game are nonexclusive in that it would be costly or impossible for a private firm to prevent access to the goods. Fishing and migratory game are nonexclusive in that it would be costly or impossible for a private firm to prevent access to the goods. Goods that are rival buy nonexclusive are called Open-access goods. Goods that are rival buy nonexclusive are called Open-access goods.

Externalities Negative externalities-by-products of production or consumption that impose costs on third parties, neither buyers nor sellers. Negative externalities-by-products of production or consumption that impose costs on third parties, neither buyers nor sellers. Ex. Aerosol spray cans (Chlorofluorocarbons deteriorates the ozone layer causing Global warming. Ex. Aerosol spray cans (Chlorofluorocarbons deteriorates the ozone layer causing Global warming. Positive externalities-by products of consumption or production that benefits third parties, who are not buyers or sellers. Positive externalities-by products of consumption or production that benefits third parties, who are not buyers or sellers. Ex. Vaccinations reduce the likelihood of contracting the disease. Reduce the risk of transmitting the disease to other. Ex. Vaccinations reduce the likelihood of contracting the disease. Reduce the risk of transmitting the disease to other.

Education Positive externalities Positive externalities Society receives external benefits from education Society receives external benefits from education Better citizens Better citizens Can read road signs Can read road signs More productive workers, able to support themselves & families More productive workers, able to support themselves & families Less likely to require public assistance or crime for income. Less likely to require public assistance or crime for income. Government provides free education for primary & secondary education. Government provides free education for primary & secondary education. Require students to stay in school until 16 yrs old. Require students to stay in school until 16 yrs old.