Question

Explain whether the following goods and services are private, public, mixed or merit goods in terms of their rivalry and excludability

2.1. A game reserve (2)

2.2. A cell phone (mobile phone) (2)

2.3. Private security services (2)

2.4. Education (2)

2.5. The National Defence Force

Answer 1

Solution

2.1.A game reserve is a private good.It is owned byprivate owners / private institutions.The benefits (in form of having good experience with wildlife) is only provided to individuals only on pay per use basis.So,it is a private good.

2.2 .A cell phone :Is a private good as the individual derivies benefit from it.So an individual has to arrange funds to purchase / acess the good and the service associated with it.Only the individual benefits from the benefits of using his/her mobile phone.

2.3.Private security services - It is private good as the individuals need to incur some cost in getting the services according to their own preferences.Security is public good through the Police force of the Govt.but any private security over and above that is an optional,customized one which is a private good.Only the individuals benefit from it.

2.4. Education - Merit Good - Mostly it is treated as a merit good.It is because eventhough it benefits the people who persue it by spending their time,money and effort,the benefits also apply to people around themin form of increased information,knowledge,awareness,decison making quality,etc.,So it is even treated as public good.But it is not a pure public good,because it is limited in quantity and not everyone will persue it even though they can persue that.Govt. will also sponsor everyone every level of education they wish to persue as they also have limited resources.

2.5. The national defence force - It is a public good because the govt.make the entire expenditure towards it and also the purpose of this resource is for the benefit of the entire public as a whole (i.e., country)  but not for individuals.