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    Public goods — Edexcel A-Level Economics A

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    Public goods explained

    Goods are classified by two characteristics.

    Read the full explanation

    Non-rivalry means one person's consumption does not reduce the amount available to others, so the marginal cost of an extra consumer is zero. Non-excludability means it is impossible or prohibitively costly to prevent non-payers from consuming the good. A pure public good has both characteristics, such as national defence or street lighting, and markets underprovide it because of the free-rider problem. A private good has both rivalry and excludability, such as a sandwich or a haircut, and can be traded in markets. Mixed cases exist: a congested road is rival but non-excludable, while a paywalled website is excludable but non-rival. These distinctions explain why government may provide public goods through taxation.

    Your focus

    1. Define non-rivalry and non-excludability accurately.
    2. Classify goods as public, private or mixed using both characteristics.
    3. Explain why public goods are underprovided by markets and may require government provision.

    Public goods exam tips

    Marking Points
    • Defines non-rivalry as consumption by one person not reducing availability for others, with zero marginal cost of an additional consumer.
    • Defines non-excludability as the inability to prevent non-payers from consuming the good.
    • Classifies a pure public good as having both non-rivalry and non-excludability, and a private good as having both rivalry and excludability.
    • Explains the free-rider problem and why markets underprovide public goods.
    • Recognises mixed or quasi-public goods that display only one characteristic.
    Examiner Tips
    • 💡Test each option against both characteristics separately before deciding.
    • 💡Reject options that define public goods by ownership or funding rather than by non-rivalry and non-excludability.
    • 💡Use a concrete example such as national defence or a sandwich to check whether the option fits.
    Common Mistakes
    • Treating public good as meaning any good provided by the government; correction: the term depends on non-rivalry and non-excludability, not on who provides it.
    • Assuming non-excludability means the good is free to produce; correction: it means non-payers cannot easily be prevented from consuming it.
    • Confusing rivalry with excludability; correction: rivalry concerns whether consumption reduces availability, while excludability concerns whether access can be restricted.
    • Believing all public goods must be provided by the state; correction: government provision is common because of underprovision, but the defining features are the two characteristics.