Microeconomics Essay Example | Topics and Well Written Essays - 250 words

Microeconomics - Essay Example2. Explain the difference between a close good and a public good. Why has there been an increase in the number of public goods produced by governments? Public Goods are goods that are non-rival and non-excludable, quite the confrontation of Private Goods (Experimental Economics Center). Public goods, being non-rival, means that the marginal utility used-up by angiotensin converting enzyme consumer does not limit the marginal utility that another consumer result use. Private goods, on the other hand, are rival goods, which mean that if there are a total of 10 pencils in the market and Consumer A utilizes 4 of those pencils, then the marginal utility enjoyed by Consumer B is decreased to only 6 pencils. Public goods are non-excludable which basically means that one consumer does not barricado other consumers from using up the public good. This differs from private goods in that should consumers use up the supply of private goods, other consumers are e xcluded from enjoying the private good. In Economics, one of the causes of Market Failure is public good and the tendency of the consumers to free-ride.