i am having difficult understanding the difference / distinction between external benefits on the one hand and public goods / common resources on the other. can anyone help me understand the difference here and why one results in underproduction / underconsumption whereas the other results in overuse and overproduction? thanks
External Benefit - Your neighbor makes their garden in the front lawn look really nice. Makes the view look better for you. You benefit from something that your neighbor did, even though it was not their intention. They just wanted to make their garden look nice. Public Good - Law Enforcement, National Defense. Common Resource - No one owns, everyone is able to use, ie. fish in the ocean. Public Goods would be underproduced if they were in a competitive market (but they are not in a competitive market), as it is not in everyone’s interest to buy a piece of this service, etc. Common resources are usually overused and I don’t think overconsumption/overuse applies to External Benefits.