In: Economics
Explain which category (Public Good, Private Good, Club Good or Common Resources) each of the following goods falls into and why:
Why do you think the government provides items that are not public goods? (free-riding)
1> Police protection is non-rival and non-excludable since police protection is for all and thus no one is excluded from it. Also, it is not rival because if I enjoy protection, it will not harm another one. So, it is a public good.
2> Snow plowing is also non-rival and non-excludable since if the snow is plowed, we can not tell someone not to go to the road and not enjoy the benefit, so it is non-excludable. It is non-rival in nature because in snow-plowing, if one enjoys the benefit, one does not get harmed. So, it is also a public good.
3> Education is a club good, because it is excludable as an University selects a group of students and can exclude someone from education. But, it is non-rival because if I get educated, I do not directly negatively affect someone.
4> Rural roads are public good unlike urban roads. Obviously, it is a non-excludable good because no one can be excluded from the road. Since the rural roads are never congested, me driving on a rural road does not affect another one.