Cambridge International as and a level Economics Ebook

Non-excludable: 
where it is not possible to stop all 
benefiting from consumption.
Non-rival: 
as more consume, the benefit to those already 
consuming is not diminished.
KEY TERMS
Th
ere are a number of goods that can be seen as public 
goods. Take the example of a lighthouse. Once a 
lighthouse is built to warn one ship at sea away from 
a dangerous area of rocks, then by its very nature, this 
service will automatically be provided to all ships that 
sail within a certain distance of the lighthouse. It is non-
excludable. Equally, the fact that other ships see the light 
given by the lighthouse and are warned away from the 
Excludability: 
where it is possible to exclude one from 
consumption.
KEY TERM
33
Chapter 1: Basic economic ideas and resource allocation

---

dangerous rocks does not reduce the benefi t that any one 
particular ship receives from that warning. It is non-rival. 
However, very few goods are purely public goods in the 
sense that they match both of the above characteristics 
in full. Other typical examples are defence and the police 
force in virtually all economies.
Quasi-public goods
While there may be some goods that can clearly be defi ned 
as ‘public’ in nature, there are others that have the essential 
characteristics but only in part. Such goods are referred to 
as 
quasi-public goods
. Th
ey are like public goods without 
truly being public goods.
Quasi-public good: 
goods that have some but not all of 
the characteristics of public goods.
KEY TERM
In practice, it is not possible to classify all products 
as being either ‘public’ or ‘private’. Many products lie 
somewhere in between these two extremes.
A good example might be a sandy seaside beach. Such a 
beach is available to all those who wish to use it. It appears 
non-excludable. However, it is possible to think of ways 
of excluding consumers. Privately owned beaches do this. 
Equally, the beach is non-rival up to a point. If you are the 
fi rst person on a pleasant beach on a warm sunny day, it 
does very little to diminish your enjoyment of that beach as 
a few more people arrive to enjoy the benefi ts themselves. 
However, there may well come a point at which that is 
no longer the case. As the beach becomes crowded, space 
limited and other people’s conversations and music become 
ever more audible, enjoyment may perceptibly reduce. Th
us 
the beach has something of the characteristic of non-rivalry, 
but not the full characteristic. It is a quasi-public good.