Public & Private Goods (AS/A LEVELS/IB/IAL)

Public & Private Goods (AS/A LEVELS/IB/IAL)

Courses Info

Level: AS Levels, A Level, GCSE – Exam Boards: Edexcel, AQA, OCR, WJEC, IB, Eduqas – Economics Revision Notes 

Public Goods

Public goods include essential goods and services such as flood defence, street lighting, policing, roads, traffic lights etc. Public good are under-provided by the free market due to the free rider problem. Public goods are mainly provided through government intervention as they are seen essential to the functioning of society as a whole.

Pure Public Goods have two main characteristics:

  1.  Non-excludability

People can’t be stopped from consuming goods or services for which they have not paid or contributed towards.

E.g. you would be unable to stop someone benefiting from a flood defence system even if they have not paid for it.

  1. Non-rivalry/non-diminishability

A product can be consumed by more than one person and not run out. If a single person benefits from using a lighthouse. Others will also be able to benefit from using the lighthouse the same amount.

Free rider problem

The free rider problem is a form of market failure. This occurs when people use a good or service without paying or contributing towards it themselves. This occurs when people do not pay their taxes towards the use of public goods such as roads and street lighting.  

Private goods

Private goods are the opposite of public goods. They also have the opposite characteristics of public goods. They are excludable and exhibit rivalry characteristics. e.g. When you eat a chocolate bar you are able to stop others from consuming the same chocolate bar.

E.g. Milk, Apprenticeships, Jobs etc.

AQA Spec – Additional Content

Quasi-Public Goods

These goods have characteristics of both a public good and a private good and are partially provided by the free market

They are semi-excludable and semi-non-rival

Technological Change

Television broadcasting is now excludable where people can purchase subscriptions and pay for them

The Tragedy of the Commons

This refers to how individuals prioritise their personal gain over the benefits gained as a society

Everyone has access to use the resources but no one specifically owns it


Quick Fire Quiz – Knowledge Check

1. Define a ‘Public Good’ (2 marks)

2. Explain the characteristics of a Public Good (4 marks)

3. Explain what the ‘Free Rider Problem’ is (4 marks)

4. Define a ‘Private Good’ (2 marks)

5. Explain the characteristics of a Private Good (4 marks)

6. Identify one example of a Public Good and one example of a Private Good (2 marks)


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A Level Economics Past Papers

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