Chapter 11

Mankiw begins the chapter with the age-old adage that the best things in life are free. He relates that to goods that are free to the public to enjoy- rivers, mountains, beaches, playgrounds and parks to name a few. This chapter examines how the government can provide goods that the private sector cannot, and how they ration those goods. Mankiw further breaks down various goods in the market using two characteristics, excludability and if the good is rival in consumption. With private goods, the consumption of a good leads to another person not being able to consume it, and it's possible to prevent people from consuming a private good. A public good is the complete opposite. Public goods promote people who are free riders, people who receive the benefit of a good without paying for it. It's hard, and near impossible, for the private market to supply a good in a market largely dominated by free riders. Once people figure out the good is not excludable, they will not be willing to pay for a ticket. Then, Mankiw goes on to list examples of important public goods, including national defense, basic research, and fighting poverty. He also argues that a free rider problem emerges when the number of beneficiaries is large and the exclusion of any one of them is impossible. All in all, this chapter wasn't too difficult, but it was a little clunky without any graphs to help along the way. I would rate it a 2/3 in terms of difficulty.