Question

Name a good of which is accompanied by spillover benefits. Explain

Answer 1

Answer — Spillover benefits refers to positive externalities. Example of goods having spillover benefits ( positive externalities) in consumption are education, health vaccination etc. The benefit of such goods are enjoyed by third party along with consumers. Third party don't pay, so they are called free riders. Social benefits of such goods are far more than Private benefits. As actual consumers are very less in number who pay for it, such goods are available in less quantity. So if government provides such goods with subsidies then those goods may be provided in socially optimal quantity.