Final answer:
Fans provided by the government to low-income families at no cost can be considered public goods in the broader sense due to their non-excludable and non-rivalrous nature within this context, despite being private goods in the market. They provide positive externalities such as improved health and reduced healthcare costs.
Step-by-step explanation:
When the local government provides fans in the summer to low-income families at no charge, the fans can be considered public goods. Public goods are typically non-excludable and non-rivalrous, meaning they can be used by many people simultaneously without diminishing the service or good for another person. However, in this narrow instance where a government provides a good that could be a private market item to a targeted group for free, the term does not fit perfectly as the fans are inherently rivalrous and excludable in their use. Yet, given the broader social benefit and the intent to address economic imbalances, they can assume characteristics of a public good.
It's important to understand that not all goods with positive externalities are public goods. Positive externalities occur when the consumption or production of a good or service confers benefits to others for which they do not pay. For instance, education has positive externalities such as an educated populace contributing to the economy and society. However, education can also be provided by private entities, making it not a pure public good.
The provision of fans by the government aims to alleviate heat-related health issues among low-income families, which could reduce healthcare costs and improve overall community welfare, displaying elements of positive externalities.