Essentials of Economics (MindTap Course List)
8th Edition
ISBN: 9781337091992
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 11, Problem 2QR
To determine
Public good.
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What is a public good? What are its two defining characteristics? Provide an example.
What is the definition of public goods? Why does the private market not produce the efficient quantity of a public good?
What are the two key characteristics of a public good? What is an example of a public good? What is the problem with leaving the provision of public goods up to the market system? What is the solution?
Chapter 11 Solutions
Essentials of Economics (MindTap Course List)
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- 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?arrow_forwardWhat is an externality? How do they affect market efficiency? If an externality is present, where is the socially optimal point of production? Where will the market produce if there is no government intervention? How do we get from the private market equilibrium to the socially optimal one?arrow_forwardExplain with the aid of an example what public goods are. Explain why public goods can be under provided and possible ways to mitigate the problem.arrow_forward
- Economics Present a model of public good provision. What is the Pareto efficient quantity of the public good? How might the Pareto efficient quantity be provided in the economy?arrow_forwardA) Will a private firm have any incentive to produce and sell a public good? Please give an explanation. B) If I decide to play loud music late at night, how can this impose a negative externality on my neighbors? You must not only explain how the impact is negative but also why the impact is considered an externality. Please give an explanation.arrow_forwarda. When a firm imposes an external social cost (negative externality), the government should impose a tax on production equal to the externality cost to ensure that the market will achieve the socially optimal outcome. Select one: True False b. The socially optimal level of emissions of most pollutants is zero. Select one: True False c. Externalities are only inefficient when they impose a cost. They are not inefficient when they bestow a benefit. Select one: True Falsearrow_forward
- Define a public good and, using a graph, explain the equilibrium of a pure public good.arrow_forwardDefine a public good. Give an example of a public good using your definition. Explain how to construct the market demand curve for a public good.arrow_forwardWhat are the two characteristics of public goods? What is the free-rider problem as it related to public goods? Is U.S. border patrol a public good or a private good? Explain.arrow_forward
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