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8 May, 2015 - 10:44

Public or collective goods are goods which are consumed collectively by all, which consumption cannot be divided among individuals, and from which no one can be excluded. An example of a public good is that of a lighthouse benefiting all ships. Public goods have large spillover benefits but must be paid by all.

Public goods are enjoyed by all. Streets, parks, bridges are available for everyone to use. Less noticeable may be national defense or the local police force, both of which provide safety. To some extent, income redistribution, such as a welfare program, is also a public good since it relieves individuals from the responsibility of having to care for afflicted persons.