What is the process by which the market economy tends toward an improvement in the standard of living? The answer is economic growth. According to CK-12, “Growth in an economy is measured by a continual increase in the production of goods and services. As a result of economic growth, the standard of living improves, meaning people are making more money, the population is able to grow, and education levels rise.“
What are some of the problems with the concept of public goods? Public goods usually refer to a commodity or service that is made available to all members of society, in economics anyway. They are also usually collectively paid for by taxation and are administered by governments. Examples include national defense, rule of law, law enforcement, and even much simpler things like drinking water and clean air to breath. An important issue that relates to public goods is known as the free-rider problem. According to Investopedia, “Since public goods are made available to all people–regardless of whether each person individually pays for them–it is possible for some members of society to use the good despite refusing to pay for it.” According to Study.com, “The free-rider problem arises when individuals who benefit from a public good avoid paying for it. Because consumers have the inducement to be free riders rather than purchasers, the market will not generate an efficient outcome and hence market failure.” If large, or widespread enough, the free-rider problem could destroy markets, and then no one else could use it.