This document compares private and public goods and services. Private goods are ones that individuals directly pay for and owners can exclude non-payers from using. Public goods are ones that everyone in society can use, it is impractical to pay for individually or exclude non-payers, and can be used repeatedly without reducing benefits to others. For a good or service to be considered public, two factors must be met: if individuals paid for it, total benefits would be less than costs, and if the government paid for it, total benefits to society would be greater than costs. The document asks the reader to consider if all education should be a private service by writing an economic report analyzing the impacts on quantity, price, school and community environments,

1. Private Goods & Services

2. What makes a good or service private?
• Individual must directly pay for it
• Owner can exclude non payers
• It can lose its benefit to others if it is
used
• For example….

4. Public Goods & Services

5. What makes a good or service public?
• Everyone in society can use it
• Impractical to pay for it individually
• Impractical to exclude non payers
• Can be used as many times without
reducing the benefit to others
• For example….

6. What are the benefits of this…?

7. You Decide

14. You sure about that last one…
• H:AP EconomicsUnit V (Market Failure & Role of

15. When do governments decide to
produce something as a public good
or service?
TWO FACTORS MUST BE MET!

16. 2 factors for a good or service
to be public
If the individual paid
for the good, the
benefits would be
less than the cost
If the government
paid for the good, the
total benefits to
society would be
greater than the cost

17. Do you think ALL education should be a
private service?
• On a separate sheet of paper, write an
economic report that answers this question.
• Your report should include some graphical
explanations.
• Things to consider
– Impact on quantity, price
– Impact on school environment
– Impact on the community
– Will a shortage and/or surplus occur?
– etc