Public Goods
Unit 2 · Lesson 2.11 · Last updated June 2026
A 45-minute lesson where students explore market failure through the lens of public goods, learn about the free-rider problem, and examine the government's role as a provider of public goods.
Overview
In this lesson, students continue to describe examples of market failures. Students are introduced to the concept of public goods, the issues that accompany them, and the government's role as a provider of public goods.
Learning Objectives
- Explain how a market can sometimes fail to produce an efficient outcome.
- Define and explain public goods and the free-rider problem.
- Describe possible methods to remedy market failure, including a role for government.
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Materials
- Instruction Slides (display during class period)
- Terms Review p. 4 (1 copy per student)
- KEY Terms Review p. 5 (1 copy for educator use)
- Student Handout pp. 6–7 (1 copy per student)
Lesson Sequence
Slides 2–4
- Display Slide 2. Students take approximately 30 seconds to select their responses to the question. Debrief the correct responses with the class. (Additional educator tips and suggested answers are in the notes section throughout Instruction Slides.)
- Proceed to Slide 3 and explain that this lesson explores situations where markets do not function perfectly. Display Slide 4 and introduce the learning objectives.
Slides 5–38
- Advance through Slides 5–6. Distribute 1 copy of Terms Review to each student and allow pairs 4 minutes to complete. Note: The extent to which a product is rival and excludable can often be debated — Terms Review is designed to let students grapple with the spectrum of product characteristics and leave room for discussion.
- Display Slide 7 and discuss class responses using KEY Terms Review as a guide.
- Progress through Slides 8–9. Use the text on Slide 9 to define public good. Click to reveal the instructions and allow students a moment to circle all examples of public goods on Terms Review. Discuss class responses using KEY Terms Review as a guide.
- Distribute 1 copy of Student Handout. Proceed to Slide 10 and use the firework example to reinforce the definition of a public good. Students should add notes and drawings to Student Handout throughout the lesson.
- Display Slide 11. Provide students with two additional examples of public goods.
- Advance to Slide 12. Introduce students to the hypothetical streetlight scenario.
- Proceed to Slide 13. Poll students' responses to the question. Record the number of yes and no votes on a whiteboard — students will reference this data in Step 11.
- Proceed to Slide 14. Allow students 30 seconds to discuss the prompt with a partner.
- Display Slide 15. Click to explain the potential for the underproduction of public goods.
- Proceed to Slide 16. Introduce the free-rider problem.
- Display Slide 17. Introduce the alternative poll results, allow students to discuss the question with a peer, and debrief as a class.
- Proceed to Slide 18. Tell students to discuss the questions with a peer before writing their responses on Student Handout.
- Display Slide 19. Students take 1 minute to generate as many additional examples of public goods as possible. Examples are shared with the class and discussed for accuracy. Note: Acknowledge that rivalry and excludability exist on a spectrum and allow for discussion.
- Advance to Slide 20. Direct students to read the 2 prompts on Student Handout under "Public Goods and Asteroid Defense." Play the short video.
- Proceed to Slide 21. Allow students to generate responses with a peer and then discuss them as a class.
- Display Slide 22. Students record their responses on Student Handout to reflect on their current understanding of the three concepts.
- Proceed to Slide 23. Explain the government's role in providing public goods using the two current event examples provided.
- Display Slide 24. Alert students to the stumbling block (as indicated by the yellow warning graphic): just because a government provides something does not make it a public good. Stress that both characteristics (nonexcludable and nonrival) must be present.
- Proceed to Slide 25. Allow students to discuss the question with a partner.
- Advance to Slide 26. Explain that in the next several slides students will be shown scenarios and partners will have approximately 10 seconds to determine whether each is an example of the government providing a public good. Students indicate their response with a thumbs up or thumbs down.
- Proceed to Slide 27. Read the scenario aloud. Allow partners 10 seconds to discuss and indicate their answers. Proceed to Slide 28 to reveal the answer. Repeat this process using Slides 29–38. Consider skipping the last 2 to 3 examples if students consistently demonstrate mastery.
Slides 39–40
- Progress through Slides 39–40. Allow students 4 minutes to write their response in the "Summarizer" section of Student Handout. Tell students to put Student Handout somewhere they can easily find it — they will need it for a future lesson (Lesson 2.12).
Aligned Standards
Voluntary National Content Standards in Economics
Standard 6 Market Failure
Standard 7 Role of Government
What Educators Are Saying
Students were engaged with the note-taking process and creating their own drawings or sketches for each vocab term. The students also thought the short videos were entertaining.
High School Economics Teacher, Arizona
Slide 10 sparked a great conversation in my classroom... I found Slides 24–36 incredibly helpful to check for understanding of the learning objectives.
High School Economics Teacher, Indiana
Fantastic for my on-level economics classes, and I've even changed some of my existing lessons because Econiful's were better.
High School Economics Teacher, Illinois