Public goods are goods that we all agree are useful and therefore are all willing to pay for. This implies that there is no efficiency problem in the production of public goods.

Public Goods

Goods that are non-excludable and non-rivalrous, meaning they can be consumed by everyone and one person's consumption does not diminish another's.

Efficiency Problem

An issue or circumstance that prevents an economic system or process from optimizing resource use to achieve the greatest output or utility.