ShmoopTube

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And finance Allah shmoop What are public goods order Well

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the public has a lot of things mostly opinions but

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also goods like public goods or goods or services that

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all people of society have access to which are created

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for public benefit rather than profit If you want to

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get all technical about it well public goods are non

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excludable and non rivalrous Well non exclude ability means that

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nobody is excluded Even if someone didn't cough up any

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cash to receive the benefits of that good whether you

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paid your taxes or not you can go to the

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park into the library Didn't pay Doesn't matter We'LL Non

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rival risk means that more and more people can consume

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the good without additional costs and without preventing others from

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consuming the good There Yeah just because your breathing the

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air While that doesn't stop your neighbor from doing so

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you can take your dog on a walk in the

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park which won't stop others from indulging in the parks

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Um you know Park nous well to contrast what's excludable

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and rivalrous I e The opposite of a public good

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Well a private good like How about roller coasters A

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roller coaster is rival risk since there can be only

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so many people on the roller coaster at once if

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the theme park is conforming Teo you know safety regulations

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Anyway The roller coaster is also excludable because well you

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have to pay to get into the theme park to

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ride the roller coaster because well theme parks care about

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profit Roller coasters are definitely private goods Will public good

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sound pretty great right There's something you topic about them

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Everyone can use them at the same time and without

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paying a cent But they have their fair share of

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problems just like private goods The biggest issue is the

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free rider problem which is well when people take advantage

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of public goods by not paying their fair share of

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the good For instance if you've ever watched a firework

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show from afar for free when it cost money to

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get closer well then you're a free rider You benefited

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from the fireworks show but you didn't pay for it

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and you couldn't be excluded from watch Sing it since

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it's like you know in the sky well when people

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get the benefits without having to pay for the costs

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of that benefit Many goods and services that people would

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otherwise be willing to pay for will disappear or never

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make it to the market at all Take our fireworks

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Example If everybody decided to free ride and watch the

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fireworks show from a bit farther away for free and

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nobody bought tickets to that firework show well then they're

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probably not going to be one next year The moral

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of the story while too much free riding kills firework

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shows and you know other goods which is why exclude

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ability and property lines are so important at least important

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to respect A theme park wouldn't last long if there

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wasn't a wall surrounding it and you could just walk

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in and ride the roller coasters for free The free

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rider problem goes hand in hand with positive externalities like

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positive externalities air benefits somebody gets without paying for them

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and without necessarily even asking for them For instance if

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you love firework shows and happen to have a great

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view of firework show from your backyard while you just

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got a positive externality the fireworks show producer can't charge

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you for viewing the show from your own backyard Maybe

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there would be more firework shows if they could make

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them mohr excludable reducing the positive vibes or positive externalities

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that they're given out for free right So what makes

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our public goods like parks and libraries work well The

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free rider problem is avoided because those goods are typically

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paid for by the government which means it's funded by

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taxes And who pays taxes You D'Oh The public does

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anyway the people who work which means free riding isn't

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a problem because most people are already paying for the

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parks and libraries Oh whether they like it or not

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People who aren't paying taxes are free riding when they

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hang out in the park in the library But because

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the numbers of free riders air so few well it

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doesn't really affect the funding of those goods And at

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least as a present it's not problematic enough to make

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libraries and parks shut down But we'LL see what the

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future holds here What else are you free riding If

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you're not paying your fair share of taxes while things

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that everyone in the country benefits from like national defense

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it's an access to clean air and water Public radio

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Yeah that's a freebie to All right Well free riding

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That isn't Okay Well the free riding Nicolas Cage does 00:04:10.095 --> [endTime] in Ghost Rider Yeah So not Okay Hi

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