This chapter focuses on one important area in which the market fails: The provision of public goods. It describes the nature of public and quasi-public goods and examines how mainstream economists use marginal cost and marginal social benefit to estimate the optimal quantity of a public good that the government should provide. The chapter also describes how governments can provide public goods directly or by using the private sector along with subsidies and regulations. It discusses case studies of how governments provide two quasi-public goods, health care and education. Health care refers to the provision of health services and drugs by doctors, nurses, clinics, hospitals, and pharmacies. Health insurance exists to spread the risk of costly catastrophic injury or illness to a large pool of people. Galbraith also observed that households became increasingly dependent on more and more commodities over time, treating new items as necessities.