fire and police service so that some people in a neighborhood would be protected from the burning and

burglary of their property, while others would not be protected at all. Protecting some necessarily means

protecting others, too.

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13.3 • Public Goods 317

Positive externalities and public goods are closely related concepts. Public goods have positive externalities,

like police protection or public health funding. Not all goods and services with positive externalities, however,

are public goods. Investments in education have huge positive spillovers but can be provided by a private

company. Private companies can invest in new inventions such as the Apple iPad and reap profits that may not

capture all of the social benefits. We can also describe patents as an attempt to make new inventions into

private goods, which are excludable and rivalrous, so that no one but the inventor can use them during the

length of the patent.
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