Public Goods and Private Goods: Economic essay

ECONOMIC ESSAY
Name
Institution Affiliation
Course
Date of Submission
Public Goods and Private Goods
There are two major types of goods in an economy: public goods and private goods. Public goods are almost free for all and non-excludable meaning that there can be a hard time separating payers from non-payers who enjoy the use of the good. Private goods on the other hand are mostly for profit and are completely excludable. Examples of public goods are: street lighting for highways, free-to-air television or radio, national security and public parks or beaches. Private goods include: a loaf of bread, a fancy gadget like The Kindle, Pay per view television, bus rides and movie tickets (Olson & Olson, 2009).
The public goods are often characterized by free rider problems in that the user does not necessarily pay to consume the good in any way. Similarly the paying user, if any, cannot be differentiated or separated from the non-paying because the use of one good by one user does not necessarily affect the use of the same good by another user. Take for example street lighting on a highway. The light is there to light up the street. It is almost entirely impossible to stop other highway users to benefit from the light that is coming from the lamps as other users are already using it.
The same applies to national security. When the enforcers or security organs are out there working to ensure that the national security is at an all time high - the benefits cannot be purported to be exclusive to only some people within the country or territory. The benefits of having secure borders are enjoyed by everyone within the territory regardless of what position or standpoint they have regarding the government or security organs (Shang & Croson, 2009).
The other public good is free-to-air radio or television. In a stand...