Economics Public Goods Questions
The role of government in providing public goods is to ensure their provision and allocation. Public goods are goods or services that are non-excludable and non-rivalrous, meaning that once provided, they are available to all individuals and one person's consumption does not diminish the availability for others. Due to the free-rider problem, where individuals have an incentive to not contribute towards the provision of public goods but still benefit from them, the government steps in to ensure their provision. This can be done through taxation and government spending, where the government collects funds from individuals and allocates them towards the production and provision of public goods. The government also plays a role in determining the quantity and quality of public goods provided, as well as ensuring their efficient allocation to maximize societal welfare.