Okuzeka
Economics vocabulary · Markets, Supply and Demand

Public good

Meaning in economics, with examples

nounCommon term

In economics, public good means: A good that people cannot easily be stopped from using and whose use by one person does not reduce what is left for others, such as street lighting.

In Turkish: kamu malı

How it is used

Economists call these two features non-excludable and non-rival. Because people can enjoy public goods without paying (the free-rider problem), markets provide too little of them, so they are usually paid for through taxes. Examples: national defence, lighthouses, public health research.

Example sentences

  1. National defence is a classic public good: protecting one citizen protects everyone.

  2. Because of free riders, private firms rarely supply public goods such as flood defences.

Common collocations

  • provide public goods
  • a pure public good
  • global public goods
  • the free-rider problem
  • market failureA situation in which a free market, left alone, does not produce an efficient outcome for society, so too much or too little of something is produced.
  • externalityA cost or benefit of an activity that falls on people who are not part of the deal and is not reflected in the market price.
  • government spendingMoney that the state spends on public services, investment, salaries and social payments such as pensions; a key tool of fiscal policy.
  • taxationThe system by which a government collects money from people and businesses through taxes on income, profits, spending and property.

More terms: Markets, Supply and Demand

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This page explains English vocabulary for learners. It is not financial advice.