Final answer:
Peace and order are considered public goods, as they are non-excludable and non-rivalrous, providing collective benefits that cannot easily be withheld from non-payers. They are maintained by the government to address collective action problems and ensure community-wide benefits.
Step-by-step explanation:
Peace and order are considered a public good rather than a private good because they exhibit characteristics that define public goods: non-excludability and non-rivalrous consumption. Unlike private goods, public goods are those that cannot be withheld from anyone and one person's use of the good does not reduce its availability to others. For example, once peace and order are established in a society, it is not feasible to exclude some individuals while including others. Additionally, the presence of peace and order in a neighborhood protects all residents from crime and disorder, meaning protecting some inherently means protecting all.
Public goods are often managed and paid for by public authorities since they provide widespread benefits that are difficult to limit to only the individuals who pay for them. Moreover, they help in addressing problems such as the free rider issue, where individuals may benefit from a good or service without contributing to its cost. This is why government services, such as national defense, police, and fire services, are examples of public goods - ensuring order and safety for the entire community, paid through taxation.