What is the difference between public goods and externalities?

Public goods are non-excludable and non-rival - i.e. you cannot be stopped from consuming the good and this does not affect others' consumption
Externalities are benefits/costs to a third party outside the market transaction
A public good such as knowledge could have positive externalities, but they are not the same thing

NS

Related Economics A Level answers

All answers ▸

What causes the aggregate demand curve to shift?


What is opportunity cost?


What is deadweight welfare loss and how is it shown on a market failure diagram?


Explain what is meant by the rate of inflation and  analyse the main causes of inflation