Public goods are those commodities from whose
enjoyment nobody can be 1 excluded.
Everybody is free to 2 the benefits of
these commodities, and one person’s utilization 3
the possibilities of anybody else’s enjoying the same goods.
Examples of public goods are not
4 one might expect. A flood control dam is a public goods.
Once the dam is built, all the people living in the area will benefit 5 their own contribution to the construction cost
of the dam. The same 6 true for highway
signs or aids to navigations. Once a lighthouse is built, no ship of any
nationality can be effectively excluded from the 7
the lighthouse for navigational purposes. National defense is
another example. Even a person who voted against military expenditures
or 8 taxes will benefit from the
protection afforded. It is no easy task to determine
the social costs and social benefits associated with a public good. There is no
practicable way of 9 drivers for 100 at
highway signs, sailors for watching a lighthouse, and citizens for the security
provided to them through national defense. 10
the market does not provide the necessary signals, economic
analysis has to be substituted for the impersonal judgment of the market
place.