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 is meant by comparative advantage?


Evaluate whether higher government spending will always increase inflation.


Discuss the macroeconomic impacts of deflation on an economy.


Why does the demand curve face downwards?