Rationale For Public Management

Managers in the public and not-for-profit sectors must optimize resource use under a variety of operating constraints. When issues of economic efficiency are encountered, the decision tools and criteria discussed throughout managerial economics can be applied across the entire spectrum of the economy. As issues of economic equity or fairness are addressed, economic theory and methodology can be used to understand and improve the public decision-making process.

public good

Products or services in which consumption by one individual does not reduce the amount available for others private good

Products or services in which consumption by one individual precludes or limits consumption by others nonrival consumption

When use by certain individuals does not reduce availability for others nonexclusion concept

When it is impossible or prohibitively expensive to confine the benefits of consumption to paying customers

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