Question

Name two public goods and explain why they are public goods.

Short answer

Public Good 1: Fire Protection Services: These are non-excludable and non-rivalrous as everyone in a community benefits from them regardless of paying taxes, and the quality of service isn't diminished with increased use. Public Good 2: Clean Air: This is non-excludable and non-rivalrous as no one can be denied access to clean air when available, and one person's consumption doesn't reduce its availability or quality for others.

Step-by-step solution

Public Good 1: Fire Protection Services

Fire protection services are provided by the government and funded with taxpayers' money. These services are non-excludable as everyone living in a community is protected from fire hazards regardless of whether they paid taxes or not. They are also non-rivalrous because the fire department can respond to multiple fires without diminishing the quality of service for others.

Public Good 2: Clean Air

Clean air is an example of an environmental public good. It is non-excludable because, when it is available, no person can be denied access to breathe clean air regardless of their payment towards its preservation. Clean air is also non-rivalrous because one person's consumption of clean air doesn't diminish the availability or quality of clean air for others to enjoy.