Market Failure - Public Goods
Public Goods - are non-excludable & non-rivalrous.
- non-excludable - it is not possible to prevent people who have not paid for a good from using it.
- non-rivalrous - consumption of the good by one person does not prevent others from also consuming it.
Free-riders are those who can use a good without paying for it.
Examples given: National Defense - it is not possible to exclude anyone within a country's borders while at the same time protecting those borders. Individuals are protected if they have paid or not.
Public Goods by Tyler Cowen - Good Read
mjmfoodie on Public Goods-
2005 AP Microeconomics Exam