Answered: 6. Explain why the free-rider problem…

Business

Economics

6. Explain why the free-rider problem is likely to happen when a group must decide to provide a public good.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: a. How does the amount produced by a free market compare with the socially-optimal level of…

A: "Since you have asked multiple parts, we will answer only the first part for you. If you have any…

Q: 3. What characterizes a public good? What characterizes an open access good? What problems do we…

A: A system that allows buyers and sellers to interact with each other and exchange goods and services…

Q: What are the two key characteristics of a public good? What is an example of a public good? What…

A: Economics is the study of how individuals divide up finite resources between individual and group…

Q: 1. The diagram below depicts the benefits and costs of vehicle trips on an urban freeway. a. Label…

A: An externality refers to the impact of an economic activity on parties not directly involved in the…

Q: What are the two characteristics of public goods? Explain the signifificance of each for public…

A: ANS A public good typically has 2 main characteristics they are as follows: Non-Rivalry : A good is…

Q: Public goods are defined as non-excludable and non-rival in consumption. If something is close to a…

A: Public goods are those goods which are non-rivalrous and non-excludable.

Q: Which of the following goods would be considered a pure public good? Select one: O O O a. National…

A: A pure public good is characterized by two main features: non-excludability and…

Q: 1, Discuss the role of the government in allocating health care costs financed by taxes revenue. 2.…

A: 1, Discuss the role of the government in allocating health care costs financed by taxes revenue.…

Q: 2. Why does the free-rider problem induce the government to provide public goods

A: A public good is a good that is provided by the government and is not offered for sale in the…

Q: 1. What are the major issues in the public provision of public goods?

A: Public goods are goods or services that are non-excludable and non-rivalrous in consumption. This…

Q: 2. The above figure shows the payoff matrix for two firms. A chemical firm must choose between a low…

A: Nash equilibrium is a sub-topic of game theory in which players play games and use strategy and…

Q: Now, imagine that two government employees proposed alternative plans for reducing pollution by 6…

A: Given: Number of firms=3 Pollution for each area=4 units

Q: Questions for Further Discussion 1. It would seem that neighbors could easily negotiate among…

A: Local governments create local laws as statutory instruments to control a wide range of matters in…

Q: 1. According to marginal analysis, in a market that experiences a positive externality, the market…

A: Since you have posted multiple questions, we will provide the solution only to the first question as…

Q: Question 11. For regulating pollution from diffuse sources, such as exhaust from cars, it is…

A: Externality is the negative or positive spillover by the consumer or producer which affects the…

Q: Consider the market for paper. Suppose that a paper factory dumps toxic waste into a nearby river,…

A: The climate change problem stems from the fact that individuals who cause environmental damage do…

Q: Explain with the aid of an example what public goods are. Explain why public goods can be under…

A: There are different types of goods in the market, one is a private good and the other is a public…

Q: use theory and figures to explain the problem of externalities and how it differs from the problem…

A: Externality refers to the effects of a certain economic activity on its surroundings. The effect…

Q: One possible solution to protecting wild species is for conservation groups to ask for…

A: Plant and animal species, as well as their habitats, are protected through wildlife conservation.…

Q: The supply of paper is described by Qs=5000P where Qs is tons supplied per year and P is the price…

A: Given , Supply function - Qs = 5000P Demand function - Qd = 400000 - 1000P Marginal External Cost…

Q: There are two workers. Each worker's demand for a public good is P= 20 - Q. The marginal cost of…

A: A "socially optimum solution" is what economists refer to when they talk about "the ideal allocation…

Q: 1) What are public goods and what is their provision 2) What are externalities and what are its…

A: 1. Public Goods : A non-excludable and non-rivalrous good is referred to as a public good. Users…

Q: explain four main roles of the government in solving the insufficiency of the market

A: (Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Roommates D, E and F can buy paintings at $30 each for their dorms. Marginal benefits are MB of D =…

A: Disclaimer :- as you posted multipart questions we are supposed to solve only the first 3 questions…

Q: 2. Externality. The table below lists the expected daily benefits between a resident that owns a…

A: There are two agents : Homeowner & Neighbor Benefit matrix is following : Homeowner…

Q: 1. What characteristic of public goods makes it very difficult for private firms to provide (or…

A: A public good refers to a product or service that cannot be excluded from consumption and is…

Q: 3. What are two characteristics of a common property resource? a. Rival and non-excludable b. Rival…

A: A common property resources are actually the natural resources that are managed and owned by a…

Q: 5. The effect of external costs on the efficient level Consider the market for bolts. Suppose that a…

A: The hardware company exhibits a high level of toxic waste that causes negative externality.…

Q: List some of the ways that the problems caused by externalities can be solved without government…

A: An externality is a cost or benefit that a producer incurs or receives but does not bear or pay for.…

Q: 1. Two interesting public goods are radio and television signals. A. In the U.S., private markets…

A: The two broad categories of goods are :- (1) Public goods (2) Private goods

Q: 1. A cap-and-trade scheme with the cap equal to efficient level of pollution _______. A. Leads to…

A: Cap and trade is a government regulatory program designed to limit the total level of emissions of…

Q: I need the optimal quantity of dams along the river for society. 500- Consider the market for dams…

A: To fulfil demand, the optimal quantity is the exact amount of inventory you should order and…

Q: 4. The advantages of command-and-control environmental regulations used in the 1970's include: a.…

A: Command and Control is one of the many approaches used in public policy. It is a type of…

Q: 3. The effect of negative externalities on the optimal quantityof consumption Consider the market…

A: It can be defined as a form of tax that is imposed by the government on the activities that generate…

Q: Define and give an example of a public good. Can the private market provide this good on its own?…

Q: -0. Which of the following are examples of activities that yield external benefits? a. Your neighbor…

A: An outer advantage or external benefit is the advantage acquired by an individual or firm because of…

Q: Explain how a global-positioning anti-theft device installed by one car owner can produce a positive…

A: NOTE “Since you have asked multiple questions, as per guidelines we will solve the first question…

Q: Identify situations where free riding problem in consuming public good or common resource/good is…

A: The free-rider problem is a sort of market failure in the social sciences that happens when those…

Q: When economists say that one of the characteristics of a Public Good is that it is “non-excludable”,…

A: Goods that are nonrival and nonexcludable are public goods. A good is nonrival when consumption of…

Q: why marine pollution is considered a negative externality?

A: DISCLAIMER “Since you have asked multiple question, we will solve the first question for you as per…

Question

6. Explain why the free-rider problem is likely to happen when a
group must decide to provide a public good.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Define Public good

VIEW

Step 2: Explain the free rider problem

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

5) Mr. Leon is at it again! He vandalized a public park. Now society has to clean it up. Based on the numbers below what would be the socially optimal amount that should be cleaned up? % cleaned total benefits total costs 25 $10,000 $1,000 50 $15,000 $4,000 75 $18,000 $7,000 100 $19,000 $10,000 *Show the marginal benefits and marginal costs, graphically.
I need help with d and e
1. True or False d. In the presence of an unpriced negative externality such as roadway congestion, marginal private benefit will be less than marginal social cost. e. The optimal level of roadway congestion is zero. f. The optimal congestion toll on a road would be the difference between marginal benefit and marginal private cost at the optimal level of road usage.
5. Correcting for negative externalities - Regulation versus tradable permits Imagine the government wants to reduce the total pollution emitted by three local firms. Currently, each firm is creating 4 units of pollution in the area, for a total of 12 pollution units. If the government wants to reduce total pollution in the area to 6 units, it can choose between the following two methods: Available Methods to Reduce Pollution 1. The government sets pollution standards using regulation. 2. The government allocates tradable pollution permits. Each firm faces different costs, so reducing pollution is more difficult for some firms than others. The following table shows the cost each firm faces to eliminate each unit of pollution. For each firm, assume that the cost of reducing pollution to zero (that is, eliminating all 4 units of pollution) is prohibitively expensive. Firm Firm X Firm Y Firm Z Method 1: Regulation Now, imagine that two government employees proposed alternative plans for…
What is the free-rider problem? Why does the free-rider problem induce the government to provide public goods? How should the government decide whether to provide a public good?
Which of the following statement about public goods is FALSE? Question 21Answer a. Public goods are provided by the government b. All of the statement are true c. The environment is a public good d. Public goods are freely accessible e. Many people can simultaneously benefit from a public good
4. Give an example of a negative externality and an example of a positive externality..?
What are the two characteristics of public goods? Explain the significance of each for public provision as opposed to private provision. What is the free-rider problem as it relates to public goods? Is U.S. border patrol a public good or a private good? Why? How about satellite TV? Explain.
2. Refer to Graph 10-1. Assume the externality is not internalised. What is the loss to society from the last unit of the good produced by the market? A. P3-P2 B. P2-P1 C. P3-P1 D. ZeroGraph 10-1 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
6. A paper mill discharges chemicals into a river that washes the shores of a downstream resort area. The private cost, social cost, and marginal benefit associated with the production of paper are given by the following equations: PMC = 5 + Q, SMC = 10 + 2Q, and MB = 35 -0.5Q. a. Provide a labelled diagram to illustrate how the competitive free market will not produce the socially optimal amount of output. b. Illustrate the efficiency loss. C. Illustrate how a per-unit tax could be used to correct this problem.
3. The effect of negative externalities on the optimal quantity of consumption Consider the market for steel. Suppose that a steel manufacturing plant dumps toxic waste into a nearby river, creating a negative externality for those living downstream from the plant. Producing an additional ton of steel imposes a constant external cost of $140 per ton. The following graph shows the demand (private value) curve and the supply (private cost) curve for steel. Use the purple points (diamond symbol) to plot the social cost curve when the external cost is $140 per ton. Sac Cont O Say Cet Demand P v QUANTITY (araf ste The market equilibrium quantity is tons of steel, but the socially optimal quantity of steel production is_ tons. To create an incentive for the firm to produce the socially optimal quantity of steel, the government could impose a ▼ of5 per ton of steel. d al anid
Solve D) and last part only in typed answer You are an industry analyst that specializes in an industry where the market inverse demand is P = 100 - 3Q. The external marginal cost of producing the product is MCExternal = 6Q, and the internal cost is MCInternal = 14Q. Instruction: Round your answers to the nearest two decimal places. a. What is the socially efficient level of output? units b. Given these costs and market demand, how much output would a competitive industry produce? units c. Given these costs and market demand, how much output would a monopolist produce? units d. Which of the following are actions the government could take to induce firms in this industry to produce the socially efficient level of output. Instructions: You may select more than one answer. Click the box with a check mark for the correct answers and click twice to empty the box for the wrong answers. You must click to select or deselect each option in order to receive full credit.…