We were talking recently. Also, benefits can be private and public. Actually, they are all located on a kind of spectrum from the “private” pole to the “public” pole.

Public goods are those goods, services and products that can be used unlimitedly by all individuals and are produced by society or the state. These things are not at all the same as private goods: although the producer bears the costs of producing such goods, they can be used by all people.

Let's look at the interesting features of such benefits. The first of them is a sign "non-excludability" of consumers— that is, it is impossible for someone to restrict access to this thing. For example, a park. It needs to be maintained, but anyone can walk in it: from a respectable businessman to a homeless person.

Lack of rivals. In fact, when consuming public goods, there is no competition for their possession. For example, you are riding a bicycle on the road. At the same time, the road is a collective good: tractors, cars, and other cyclists ride along it. Of course, there are drivers who care little, but I sincerely hope they are a minority.

Indivisibility of a public good means that the consumer cannot somehow regulate the volume of consumed items. For example, the state provides us with the service of protection from external enemies who sleep and see how our country can be shredded into semi-dependent states. So all Russians enjoy this benefit. At the same time, it is impossible to determine its volume: which armies specifically are currently involved in the defense of Russia, in what quantities? How many Iskander installations keep our dissatisfied citizens peacefully sleeping? Who would know?

Territorial limitation of consumption of public goods. This means that its consumers can be representatives of a given community of citizens that occupies a certain territory. Although a completely different community can produce such goods.

For example, there is an international community that has obliged developed countries to implement environmental treatment facilities. It is clear that, for example, residents of Germany enjoy this benefit: they breathe clean air, drink clean water, walk on clean streets, live in houses made of environmentally friendly materials. Lepota!

Of course, I’m silent about Russia - with us, unfortunately, everything is on paper, and not in reality.

As a result, we can say that the existence of public goods is an example of an imperfect market when government intervention is required for their implementation.

Kinds

Pure public goods- exist only in theory, they possess all the above-mentioned characteristics of this category of things. Actually, that’s why there are no examples. Why don't these benefits exist in reality? Well, look: you see how people walk in the park, use the public good, you see that they really enjoy the weather and the park. But at the same time, all the benches in the park, as luck would have it, are occupied, and you feel the urge to sit. Got it?

Mixed blessings -represent the bulk of actually existing public goods. Mixed goods, in turn, are divided into overloaded and overfilled. I think it’s clear that those same parks and public places can become overcrowded.

Also characteristic of reality is the limitation of the consumer exclusion rule. For example, everyone can watch TV, but there is cable TV at an additional cost. It’s the same as there are toll roads, etc.

Also among public goods there is such an interesting type as worthy and unworthy goods. Worthy ones are those that are provided by society, but individuals, due to the so-called sovereignty of the consumer, do not use them too much. Therefore, society should promote increased consumption of these goods.

To such worthy benefits include: free education, theaters, operas, etc. Well, who really goes to school? Yes, only a few. The rest serve out their free school education.

In turn, unworthy goods are those whose consumption should be limited. For example, consumption of alcoholic beverages, etc.

Examples of public goods

From all of the above, it may seem that only government services are public goods. Indeed, the state itself is a normal service that gives us: “free” school education, roads, lights the streets, protects us from external enemies... And the more such social benefits, the more accurately we can call such a state social.

For example, I know that in many highly developed countries you can stock up on groceries for free every morning. And those who really have nothing to eat will definitely not die of hunger. In Hungary and the Czech Republic, cities are equipped with heating points where any homeless person (or ordinary citizen) can warm up and eat fried food for free.

In many states, unemployment benefits are such that you don’t have to work at all. For example, in Canada it is almost $500 per month (or per week - I don’t remember). In a word, you won’t die if you want to.

Meanwhile, not only some government services are called public goods. Social networks, Youtube, free services on the Internet: free mail, 30 gigabyte virtual disk, free online document editors... you can't count it all. Such public goods are provided by corporations such as Google Inc., Yandex LLC and others.

And I’m generally silent about social networks. Through Skype you can call anywhere in the world for free and arrange entire telephone or video conferences... Isn’t it a fairy tale? It turns out that not only the state provides us with public goods, but also large corporations.

But why do they do this - write your assumptions in the comments - we’ll discuss!

Best regards, Andrey Puchkov

The manual is presented on the website in an abbreviated version. This version does not include testing, only selected tasks and high-quality assignments are given, and theoretical materials are cut by 30%-50%. I use the full version of the manual in classes with my students. The content contained in this manual is copyrighted. Attempts to copy and use it without indicating links to the author will be prosecuted in accordance with the legislation of the Russian Federation and the policies of search engines (see provisions on the copyright policies of Yandex and Google).

13.2 Public goods

So far we have considered markets for so-called private goods. These benefits have two characteristics: excludability And competitiveness.

Excludability– the ability to exclude an individual who does not pay for a good from the consumption process.

For example, if you don't pay for a tablet, you won't be able to use it because it won't be yours. If you don't buy a ticket to the cinema, you won't get in and watch the film. However, such a benefit as a river embankment is not excluded. You can walk around it even if you don't pay. Therefore, excluded goods are usually free.

Competitiveness– reducing the possibility of consumption of a good by other people when it is consumed by a certain person.

If you consume a tablet, it is no longer available to anyone at that moment. This is a competitive good. This also happens when you consume items of clothing or food. However, when you consume a movie or go to a nightclub, you do not make these goods less available to other consumers. These are non-rival goods.

There are also anti-rival goods. The more consumers consume a given good, the more valuable it is. The classic example is software.

Almost all the benefits that we are used to paying for are excludable and competitive. But there are goods that do not fully possess these properties.

Depending on these characteristics, all benefits can be divided into four categories:

1. Competitive and excludable. This private goods, which each of us is accustomed to receiving in the markets in exchange for money. A car, a computer, food, clothing - almost everything that we are used to buying is private goods. For example, let's take your jacket. If you don't pay for it, you won't get it. This good is excludable. Further, if you are currently wearing the trigger, it cannot be worn by other people. This good is competitive.
2. Competitive but non-excludable goods. These are the so-called shared resources. A classic example is fish in the ocean. If you catch a fish, it won't be caught or eaten by anyone else. This is a competitive good. At the same time, it is practically impossible to prohibit anyone (with some exceptions) from fishing in the ocean. This benefit is non-excludable. Another example is a park bench: if you occupy it, it will become inaccessible to other consumers, at least for a while. At the same time, it is impossible to make this benefit paid, because it would separate those who pay for the bench from those who do not pay.
   There is a way to transform these goods into private ones - to provide expensive control institutions. For example, in the example with fish, this could be the water police, and in the case of a bench, surround it with a fence and place a ticket inspector next to it.
3. Non-rival but excludable goods.
   These are the so-called club benefits. Club goods in economics are non-competitive goods, access to which is limited by a fee or rules of use - an uncongested toll road, a private beach, a concert, satellite television. A classic example is a concert by a famous musician. It is easy to be excluded from using this benefit: those who do not have a ticket do not get into the club or stadium. However, this good is non-rival: if you come to the concert, this will not mean that other people cannot come to it.
   Another example is natural monopoly markets. For example, let's take plumbing. It is easy to exclude someone who does not pay for the benefit: over time, water will stop flowing to this individual’s apartment. However, this good is non-rival: if you use running water, this does not reduce its availability to other consumers. In markets of such goods, the costs of servicing an additional user are so small that they are not significant; large fixed costs make up a significant part of the costs.
4. Non-rival and non-excludable benefits. This pure public goods(sometimes called simply public goods). A classic example is a street traffic light. It is impossible to separate the one who pays for a given good from the one who does not pay. Consumption of a given good by one person does not make it less accessible to others.

When a good is non-excludable, when it is consumed, free-rider problem. The problem is that payment for the use of these goods is difficult to obtain, and therefore private firms may have no incentive to produce such goods. It is difficult to charge pedestrians and car users for using traffic lights. If your neighbor in the countryside decides to hold a fireworks display, and you indulge in the spectacle, then it is difficult for him to collect payment from you for the spectacle. That is, the market mechanism does not ensure the production of these goods in quantities effective for society, therefore this is considered one of the failures of the market.

Let's look at some examples of public goods

National Defense

National defense is a non-excludable and non-rival good. Citizens receive this benefit from the state in exchange for paying taxes, which supports the military institutions necessary for this with taxpayers' money. This benefit is presented equally to all citizens. If someone does not pay taxes, he still receives this benefit. Under these conditions, individuals may have incentives to evade taxes; in response to this, the state creates a system of institutions to control the payment and collection of taxes. Benjamin Franklin said that “there are only two things certain—death and taxes.” At various times, there have been many discussions about what level of spending on national defense is acceptable to society. This is not easy to determine, since it is difficult to calculate the real benefits from different amounts of supply of a given good.

Basic scientific research

Basic scientific research is also a public good. The results of such research are used everywhere, from medicine to food production. At the same time, it is practically impossible for a scientist to benefit from the discoveries made, since they are difficult to patent and they are publicly available. Therefore, all over the world, such research is subsidized by the state. The benefits of research and the results obtained are very difficult to determine, so there is also debate around the issue of the optimal level of subsidies for basic research.

The optimal size of a private good is easy to determine - to do this, it is enough to create conditions for the unhindered exchange of this good on the market with many buyers and sellers, and the invisible hand of the market itself will determine the optimal size of production and consumption. The optimal size of a public good is difficult to determine. First of all, because the process of its consumption involves many individuals who do not want to disclose their preferences in the form of prices. In other words, they do not want to pay for this good, which means communicating certain information to the market. As a result, the problem of providing public goods has to be solved not through the market, but through other mechanisms, for example, government intervention. To decide on the optimal amount of a particular public good, the government usually involves economists who perform a cost-benefit analysis., which in the case of public goods is a difficult task. The complexity of the task lies in the fact that economists cannot use price signals to estimate the benefits of consuming a given good. What ways are there to assess the benefits of participants when the price mechanism does not work? An obvious way is to survey possible beneficiaries. For example, when providing a benefit such as basic scientific research in the field of robotics, the survey might be: “How would you rate your benefits from using a robotic cleaner around the house?”

However, such surveys can never provide accurate results for two reasons:

1. It is impossible to obtain the preferences of all participants in the process of consuming a good, since there can be a lot of them
2. Individuals will distort their estimates. Those individuals who are interested in a cleaning robot will inflate their benefit estimates in order to get this development faster. Individuals who are afraid of progress will say that their benefits are zero, despite the existence of real benefits from the cleaning robot.

So, we realized that the optimal amount of a public good is difficult to determine, and economists are usually involved in this task ( after all, the main goal of economics as a science is to make the lives of all of us better). Who represents public goods if the private sector has no incentive to do so? The answer is: state-owned enterprises and private firms receiving a state order (in this case it is also paid for by the state). For example, roads and tunnels all over the world are built by both state-owned companies, mixed (public-private companies), and completely private ones.

In the field of public goods, one of the most interesting tasks facing economists is determining the optimal amount of goods associated with ensuring the safety of individuals' lives. This problem can be well illustrated using an example such as the decision whether or not to install a traffic light in a city.

A traffic light is a pure public good because it has the characteristics of nonrivalry and nonexcludability. Traffic lights benefit pedestrians and motorists in the form of fewer accidents and, as a result, lives saved. A traffic light has costs in that the city budget needs to pay for the production and installation of the traffic light.

To decide whether to install a traffic light, the city council must weigh the costs against the benefits. But since the benefits are lives saved, how do you measure those benefits? In other words, how to value human life? This formulation of the question is probably seditious for the average person, but it makes sense for an economist. Conventional logic dictates that there is no answer to the question, since human life is priceless. Many people will answer the same question when asked, “What is your life worth?”, so taking a survey to get estimates is a pointless exercise. But from the point of view of an economist, this problem has a solution, and the price of life can be determined more or less reliably. People, responding to stimuli offered to them in the real world, can reveal information about their assessments of life, while even sincerely believing that a person’s life is priceless. For example, people choose riskier professions by agreeing to work for higher wages. Salaries in similar professions with different levels of risk also differ. For example, coal miners who mine coal in a mine are paid higher than coal miners who mine coal in an open pit. Or people are willing to pay significantly more for a safer car, thereby disclosing information about their assessments of their own lives. Citing rough calculations, Sergei Guriev in his book “Myths of Economics” gives approximate estimates of the human life of a Russian, which range from 1 to 3 million dollars.

Thus, from the point of view of an economist, the price of life can be determined, which means that the traffic light problem has a solution. To do this, you need to compare the benefits of a traffic light with the costs of it. The benefits can be roughly estimated this way: estimate the probability of accidents with and without traffic lights, and multiply it by the estimate of human life.

13.2.2. Tragedy of the Commons

Tragedy of anticommons

The materials in this section are not published on the website, but are available in the full version of this manual, which I use in classes with students.

Production of public goods

Organizing the production of public goods is one of the most important economic functions of the state in a market economy. Public goods are those goods whose main characteristic is non-excludability from consumption and non-rivalry in consumption. Public goods include some material objects, but more often they are intangible goods, not like ordinary goods. Nevertheless, these are very real economic goods, since, on the one hand, they are useful for consumers, and on the other, their creation requires the expenditure of resources that could be used to produce other goods. Public goods include the establishment of law and order (constitutional and other norms) and property rights, which is a prerequisite for the normal operation of the market mechanism.
There are pure and mixed public goods. Pure public goods are those goods that are consumed by all people regardless of their payment. Classic examples of a pure public good are national defense, city lighting, lighthouses, scientific knowledge (with free education), etc. In contrast, pure private goods are goods that provide utility only to the buyer who bought them in the market and has the exclusive right to use them and receive the benefits associated with them. There is no price at all for a pure public good, since this good cannot be sold individually. All people derive utility from the total supply. All pure public goods have the above two properties to a pronounced degree. Let's look at them in more detail:
1. Such goods can be included in several consumption functions simultaneously, i.e. consumed by many people without harming each other - the property of non-rivalry in consumption. This means that for a given volume of a good, its consumption by one person does not reduce its availability to others. Non-rivalry is essentially the extreme case of a positive externality. Many people share and simultaneously enjoy protection from fires and military attacks, and it is impossible to say which of them is the “main” recipient of the service and who receives the external effect. The number of users can grow with a stable level of production of public goods. The marginal cost of allowing an additional consumer the right to benefit from a pure public good is zero. This is the case because no one loses when another consumer benefits from a given amount of net public good. Consumption of a pure private good, on the contrary, is associated with competition. Consumers compete for available quantities of this good. When the consumption of a good involves competition, buyers know that they must compete with each other for the right to obtain cash quantities of that good.
2. Consumption of pure public goods is not an exclusive right, or, as they say, they have non-excludability in consumption. This means that consumers who are unwilling to pay for such goods cannot be deprived of the opportunity to consume them. Non-excludability means that the producer has no real choice whether to provide the benefit only to those who pay for it or to everyone who wants it. More precisely, the nature of the good does not allow preventing its consumption by an individual who does not fulfill the requirements that the supplier makes or would like to make. The most striking example of a product for which it is impossible to limit the number of users is national defense.
The properties of public goods are internally interrelated. Apparently, all goods produced by people that are non-excludable are at the same time characterized by non-rivalry in consumption. The more pronounced the non-rivalry, the more likely, other things being equal, the non-excludability. In practice, as a rule, only a small number of goods have all the properties of pure public goods.
Different public goods have the properties of non-rivalry in consumption and non-excludability to varying degrees. Those in which at least one of the properties is expressed to a moderate degree are called mixed public goods. Excluded public goods are those goods whose consumption is indiscriminate, but for which the costs of the operation of limiting consumers' access to them are relatively low. These benefits can be offered to firms operating for profit. Excludable public goods, or public goods with limited access, are those goods for which it is easy to assign a price. An example of such a good is vaccinations. Another example is schooling.
Congestible public goods are those goods whose consumption is indiscriminate only up to a certain number of increasing consumers. To achieve efficiency, it is necessary that such goods be priced wherever possible at marginal cost to avoid overloading them.
The optimal volume of production of a private good is determined by comparing the marginal gain from producing an additional good with the marginal cost of producing this good. Efficiency occurs when marginal benefit and marginal cost are equal. Let's apply the same principle to public goods, but the method of analysis is different. The efficient volume of production of a public good is achieved if the sum of the marginal gains of its consumers is equal to the marginal costs of production.
If payments for purely public goods are made in accordance with the marginal benefits of their use, there are powerful incentives to hide true information and downplay the actual size of the benefits received. Since consumers receive benefits from a purely public good, regardless of whether they pay for it or not, there is a desire to do without extra payments, to receive this benefit for free. This situation is called the “free rider” problem.
This problem arises more often in large than in small groups of consumers, since it is more difficult to obtain the necessary information about the situation of payers. Let's say that by simply surveying the population it is impossible to find out how much public goods to produce and who is interested in their production. A well-known example is the case of street lighting. If you start interviewing street residents, trying to find out each person’s need for lighting and, depending on this need, determine his share in financing the production of this good, most likely people will tend to hide their true needs in order to evade payment or reduce it. The temptation to become a “free rider” and shift the burden of payment onto others is very strong. As a result, there is a danger of underestimating the volume of production of the good as a whole (in our example, the street may remain unlit).
As a result of the emergence of the “free-rider problem,” the production of purely public goods is lower than efficient, which necessitates government participation in their production and financing. In turn, the state obliges its citizens to systematically pay for the production of public goods in the form of collecting taxes, which is an economic lever of influence in solving this problem.

An example of a simultaneously economic, material and long-term benefit is

1. An example of a simultaneously economic, material and long-term benefit is...
bench
sunlight
paints
rail transportation
Solution:
A good is economic if the need for it exceeds its available quantity, material - if it has a material form, long-term - if it is possible to satisfy an ever-new need with the help of the same unit of good.
In this case, such an example is a bench - their number is less than the need for them, they have a material form, every time we want to sit down, we can use this bench.
Sunlight is a non-economic good, rail transportation is both an intangible and short-term good, and paint is a short-term good relative to the characteristics listed.

2. National defense is an example of a __ good.
pure public
pure private
mixed public
mixed private
Solution:
A pure public good is a good that is indivisible into individual portions in the process of consumption, and therefore is consumed collectively by all people, regardless of whether they are willing to pay for its consumption or not. A pure private good is a good, each produced unit of which can be valued and transferred for use to each specific consumer. A pure public good is highly characterized by the property of non-excludability (if a good is available to one, then it is impossible to prohibit its consumption by another) and non-rivalry (the consumption of a good by one person does not affect the amount of this good available for consumption by other persons) in consumption. Mixed public goods are characterized by limited manifestation of at least one of these properties. The term “mixed private good” is missing.

3. An example of an economic material good is...
forest
travel by trolleybus
world Ocean
sunlight
Solution:
Non-economic goods are free goods, freely provided by nature and existing in quantities sufficient to fully and permanently satisfy people's needs.
Economic goods are the result of people's economic activities. Their volumes are limited compared to needs.
Economic benefits include forests and trolleybus travel.
Benefits are also divided into tangible and intangible. 4. Material goods have a material form.
Therefore, an example of an economic material good is a forest.

4. From an economic point of view, a product is not...
frost formed as a result of people's breath on a car window in cold weather in winter
forest restoration necessary due to irrational environmental management
relocation of dung beetles to Australia so that there is someone to process cow dung
absence of clouds at any point in time due to targeted aviation actions
Solution:
A product is the result of purposeful human labor, so frost formed as a result of people breathing on a car window in cold winter weather is not a product.

5. Transporting goods is a blessing...
economic, intangible, short-term
non-economic, intangible, long-term
non-economic, material, short-term
economic, material, long-term
Solution:
To the extent that it is limited, the transport of goods is an economic good because the demand exceeds the quantity available. Since this is a service, in terms of the presence of a material form it is an intangible benefit, and in terms of the time of consumption it is short-term.

6. According to the degree of limitation, benefits are divided into two groups...
economic and non-economic
long-term and short-term
tangible and intangible
private and public
Solution:
All benefits, according to the degree of limitation, are divided into economic (the need for them exceeds the available quantity) and non-economic (available in a larger quantity compared to the needs).

7. Private goods include (are) ...
plot of land for individual development
bridge across the river, built with donations from city residents
lanterns illuminating the pavement of a private housing block
public security and state defense system
Solution:
A pure private good is one in which each unit can be valued and sold so that it provides utility only to the buyer. Neither the bridge over the river, nor the lamps that illuminate the pavement, nor public safety and defense can be valued and transferred for consumption to a single consumer, and therefore are not private goods.

The purpose of the lesson: to reveal the essence of a public good as a good that is consumed jointly, that is, everyone consumes it together; find out the main characteristics of a public good, study its classification and the main characteristics of a private good; explain the main reasons for the emergence of a public good; develop economic thinking; cultivate a thrifty attitude towards resources.

Basic concepts: public goods, private goods, types of public goods.

Lesson type: learning new material.

DURING THE CLASSES

I. Organizational moment

II. Checking homework

III. Updating the basic knowledge and skills of students

IV. Motivation for educational and cognitive activities

Public goods are the needs that arise in the process of development of society as a whole, its individual members, and socio-economic groups of the population. They experience the influence of the production relations of the socio-economic formation under which they take shape and develop.

Public goods are those that are equally available to all members of society and do not require direct payment. A public good is defined as a good that is consumed jointly, that is, everyone consumes it together; A public good cannot be divided into separate parts and sold or bought on the market, just as it is impossible to deprive someone of the right to use it. One person's consumption does not reduce the consumption of that good by others. Classic examples of such benefits are the legislative system, services in the form of the use of public buildings - roads, parks, lighthouses. The most important public goods are education, health care, national defense, national libraries and other national cultural institutions, such as national opera and ballet companies, national collections of paintings and art, etc. Using a public park, for example, does not reduce its accessibility to others. This distinguishes public goods from most goods on the market, which are called purely private goods.

V. Learning new material

In a market economy, the production and distribution of goods occurs using the price mechanism. For producers and consumers, the principle of exclusion applies, which means that a certain benefit is received only by those who are able and willing to pay the price set for it. Other economic entities are eliminated from the process. In addition, only those goods are produced whose prices exceed costs, that is, producers are trying to avoid inefficient production. Individual economic entities on the market make independent decisions (according to their own preferences and financial capabilities) about what should be the volume and structure of their supply and demand for various goods. The quantity of goods that an economic entity can obtain at its disposal depends on its purchasing power.

In a market economy, in addition to market (or private) goods for which there is an individual right of ownership, there are so-called “public” or collective goods.

Public goods have two characteristic features.

A pure public good is one that is consumed collectively by all citizens, regardless of whether people pay for it or not. A purely public good is characterized by two properties: non-selection and non-exclusion from consumption.

1. The impossibility of excluding a certain object of consumption (not exclusivity). A good is non-exclusive if it cannot be excluded from the sphere of its consumption.

The property of non-exclusion from consumption means that no person can be excluded from consuming a good, even if he refuses to pay for it. A purely public good has a kind of positive externality: once someone starts consuming it, it becomes available to everyone.

National defense is a prime example of this. If a nation has provided a defense system, all citizens enjoy its benefits. The lighthouse is also an example of non-exclusive goods.

Non-exclusive products are not necessarily national in nature. If the regional government implements a pest control program, all farmers and consumers will benefit. And if an agent sells a new car to one consumer, then he excludes the opportunity for others to buy that particular car. Therefore, the car is an exceptional good (as well as a competitive good).

2. The property of indiscriminate consumption means that the consumption of a purely public good by one person does not reduce its availability to others. A good is nonrival if, for any given level of production, the marginal cost of additional consumption is zero. For example, using a beacon. Once built, an additional vessel adds nothing to its operating costs. Most goods are competitive in consumption.

Some goods are exclusive but nonrival. For example, during a period of insignificant traffic, crossing a bridge has a non-competitor - it, since the appearance of an additional car does not affect the speed of other cars. But passage on the bridge is exclusive, since the owners of the bridge can prohibit use of it.

A number of goods are non-exclusive, but competitive. Air is non-exclusive, but can be competitive if one firm's air pollution adversely affects air quality and the ability of other people to enjoy it to its fullest.

Public goods are non-rival and non-exclusive, benefiting people at zero marginal cost: no person is excluded from consuming them. The classic example is national defense. The defense system is non-exclusive, as already mentioned, but it is also non-competitive, since the marginal cost of providing defense for one additional person is zero.

Public goods are both competitive and exclusive. For example, a national park. Some of the public may be excluded from using the park by increasing entry fees and the right to camp. Use of the park is also competitive (since it may be crowded with numerous visitors, and the entry of an additional car into the park may reduce the benefits received by other consumers).

In cases where the interests of consumers of a public good are homogeneous and decisions are made unanimously, the collective provision of a public good increases consumer surplus.

To better understand the features of a purely public good, let us compare it with a purely private good. A purely private good is a good, each unit of which can be sold for a fee. Unlike a purely private good, a purely public good cannot be divided into units of consumption (it cannot be produced in “small” batches) and sold in parts.

The characteristics of the statement of private goods are two properties: on the one hand, they are the object of competition among consumers (private goods are “competitive”), and on the other, for those consumers who are not willing to pay the market price for using them, they are inaccessible (private goods are such that they are “removed”). Most economic goods are private. But, besides them, there are “non-competitive” benefits and those that are “not withdrawn.” they are called "public". Thus, listening to a radio broadcast by one owner of a radio receiver does not interfere with listening to the same broadcast by all other radio fans (radio broadcasting is “non-competitive”).

On the other hand, a radio station does not have the ability to prevent someone from using its services on the grounds that he has not paid for them (a radio broadcast is such that it is “not excluded”).

In addition to purely private and purely public goods, there are intermediate (mixed) goods that do not fully have the properties of either private or public goods.

There are also quasi-suspended goods (“quasi” - supposedly) - goods and services that are not collected on the principles of non-exclusion and non-competition. The principle of exclusion can be applied to them (public libraries, preventive health care).

The essence of the state is revealed and realized in its interaction with society. The measures taken by the state to streamline and improve the public, collective and private life of people are characterized by the concept of “state functions”. The word "function" comes from the Latin. functio and means “execution”, “duty”, “circle of activity”.

Since the market mechanism allows people to satisfy only those needs that are expressed through individual demand, the provision of public goods (goods and services for collective purposes) to the population becomes an important function of the state in the social economy.

Regarding the production, reproduction and provision of “public goods” in the social economy, a situation arises that differs significantly from traditional economic relations based on market principles. “Public goods” cannot be sold on markets because they have specific properties of production and supply or consumption and demand for them. It is clear that in real life there is hardly any good that has all these features in total, and therefore the boundary between the benefits of individual and social use is quite changeable, and sometimes barely noticeable.

The concept of “public good” is quite vague. Since potential consumers benefit from a public good regardless of whether they paid for it or not, it is difficult to identify their consumption preferences and intensity of use of the good. Thus, it is almost impossible to calculate the limits of the intensity of use of a park in which a large number of people are present at the same time. Since consumers do not voluntarily pay for the use of a public good, it turns out that indicators of market demand for such goods either do not exist or are significantly underestimated. Therefore, the demand for such goods does not create income sufficient to cover the costs of production, although the collective benefit from this good may equal or even exceed the corresponding economic costs. In real life - the life of society - the provision of “public goods” and their financing is carried out at the expense of the central and local (regional) budgets. This is done by a special sector in the national economy.

The state carries out its functions using economic and administrative methods. They are interconnected and at the same time opposite. There are areas where the use of administrative methods is effective and does not contradict the market mechanism.

Government-provided public goods are designed to satisfy collective needs that cannot be measured in monetary terms and cannot be produced by the market. Public goods connect, on the one hand, collective needs, and on the other, the tax and budget policies of the state. To produce public goods, the state implements taxation. The structure of budget expenditures must correspond to the structure of demand for public goods.

In some situations, the market mechanism cannot automatically ensure equilibrium due to externalities arising in the processes of market production and consumption. The state intervenes in the economy and ensures pseudo-market equilibrium. Through a special tax, it redistributes income in favor of those who suffer losses that are not taken into account by the market.

The government intervenes in pricing to ensure that the price of goods and services takes into account externalities.

Excess of the state beyond the outlined maximum boundaries makes it necessary to denationalize the economy. The problem is especially relevant for countries moving from total nationalization of the economy to a market economy. Such methods of denationalization as privatization of property, liberalization of markets, improvement of the public sector, and creation of mixed enterprises have proven themselves well.

Society's needs for goods are genetically and historically the root cause of human activity, but at the same time they are the result of this activity. Activity is a way of existence of society. Just like, for example, movement is a way of existence of matter. Each of us obeys the law of needs for certain goods, without realizing it, because our needs build the present and the future. Such needs also created history.

VI. Consolidating new knowledge and skills of students

1 ). Create a schema

In your notebooks, build a diagram of the public and private goods that your family uses (one student works at the board).

2). Solve test problems

1. Characteristic features of public goods:

a) indiscriminate consumption;

b) division into consumption units;

c) unavailability for consumption;

d) disconnection from consumption.

2. Determine which of the following applies to public goods:

a) private park;

b) car;

c) national library;

d) residential building;

3. The role of the country's government in creating public goods:

a) a decrease in the general price level and unemployment rate;

b) tax regulation;

c) promoting monopolism;

d) privatization of state-owned enterprises.

4. We can include the following benefits as private:

a) highly competitive in consumption;

b) with low competitiveness in consumption;

c) with low exclusivity;

d) low cost.

5. The reduction of common goods entails:

a) their high competitiveness;

b) excessive growth of the money supply;

c) expectation of rising prices in the future;

d) growth in exports.

Answers: 1 - a; 2 - in; 3 - b; 4 - a; 5 - a.

3). Task

In a certain locality there live 10 thousand families whose potato plots were damaged due to the invasion of Colorado potato beetles. The question arises: how best to deal with this - individually or collectively?

Control measures can be carried out by each household individually, and for such a one-time destruction of pests on their site, 10 UAH are needed, while the number of pests destroyed will be 50%. Pests can be controlled from the air, but then holding one collective event will cost 5,000 UAH. , while the number of pests destroyed will be 100%.

Determine what is more profitable - collective or individual provision of public goods.

VII. Lesson summary

VIII. Homework

1. Work through theoretical material.

2. Graphically depict the factors of the macro- and microenvironment.