Principles of Microeconomics / Unit 17 MIC 1637 short lesson, about 20 seconds
Public Goods and the Positive Case
Captions available
The idea
A positive externality underproduces; a subsidy equal to the spillover corrects it. A public good, nonexcludable and non-rival, is underprovided because users ride free; taxes provide it. A common resource, nonexcludable but rival, is overused because nobody owns it.
In practice
Vaccines, defense, fisheries: too few, too few, too many.
Where people slip
Classify by the good's two properties, not by who provides it.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
Unlocks
- Nothing yet depends on this.
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