141k views
5 votes
A light house is an example of:

A. a private good since a business person could make a significant profit on a lighthouse that was guarding a dangerous reef. Mariners would gain a lot of benefit from being warned and therefore would be willing to pay a lot.
B. a public good because if one boat sees the light it does not reduce the ability of other boats to see the light, and there is no way for a lighthouse owner to turn off the light for a non-payer but still leave it on for those who do pay.
C. a common good since all mariners share the benefit of the good in common.
D. a private good because it is not illegal for a private firm to own a lighthouse.

User Johnetta
by
7.7k points

1 Answer

5 votes

Final answer:

A lighthouse is an example of a public good because its use by one party does not diminish availability to others, and exclusion of non-payers is not practical. The government provides certain public goods like lighthouses because they are critical for public safety and are not profitable for private firms, whereas radio stations can be profitable through other models.

Step-by-step explanation:

A lighthouse is an example of a public good because it is both nonrivalrous and nonexclusionary. This means that when one boat benefits from the lighthouse by seeing its light, it does not prevent other boats from also seeing the light, and the service cannot easily exclude boats that do not pay. Therefore, the correct answer to whether a lighthouse is an example of a private good, a public good, a common good, or none of these is that it is a public good.

The reason the government typically provides public goods like tornado sirens, streetlights, and lighthouses, but not radio stations, is that public goods are often crucial for safety and welfare and are not profitable for private firms to supply due to their nonexcludable nature. Services such as tornado sirens and lighthouses are essential for public safety, and exclusion of non-payers is either impossible or not practical. Radio stations, though also nonrivalrous and nonexclusionary, have found a model through advertisements and subscriptions to cover costs and generate profit, which is why they are largely provided by the private sector, except for PBS stations which are publicly funded to serve the public interest sans commercial influence.

Government intervention in the provision of certain public goods ensures that the tragedy of the commons is avoided. This is a situation where individuals acting independently according to their self-interest behave contrary to the common good of all users by depleting or spoiling that resource through their collective action.

User Immy
by
8.5k points