Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 16, Problem 2.3P
(a)
To determine
Should government be involved in providing health care as health care is a public good.
(b)
To determine
Whether an unregulated market economy tends to under produce public goods.
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What are the two characteristics of public goods? Explain the signifificance 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.
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.
(a) Define public goods and common resources and give an example of each. What is the free-rider problem? Why does the free-rider problem induce the government to provide public goods?
(b) How should the government decide whether to provide a public good? Why do governments try to limit the use of common resources?
Chapter 16 Solutions
Principles of Economics (12th Edition)
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Similar questions
- The south African government develops targets that pertain to healthcare and education. Which of the following statements explains why government provides these two goods? A. The benefit to society of healthcare and education is extremely low. B. The benefits that society receives from health care and education exceed those that accrue to an individual user. C . The government spends money on health care and education because they are public goods D. Health care and education only produce negative externalities.arrow_forwardDescribe a positive or negative externality that you have observed in your life. In the example you provide, determine if the externality is positive or negative, explain why, and discuss if you feel like government intervention is present and/or needed. If so, how does (or how could?) the government increase market efficiency?arrow_forwardWhat 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?arrow_forward
- What 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_forwardWhat are Public Goods and Common resources? Describe in your analysis the issues that governments face as a result of these goodsarrow_forwarda)Some advocates of anti-poverty programs claim that fighting poverty is a public good. Explain what these advocates mean by classifying charity as a public good. b)Why do governments tend to run programs that help the poor? Can the private sector be left to run those programs? Discuss your answer by focusing on externalities and market failurearrow_forward
- 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_forwardPublic goods are often thought to be goods or services that are provided by the government, but that is confusing cause and effect. What are the characteristics of a public good? Hint: Who provides the public good is not one of the characteristics.arrow_forwardDifferentiate between a public good and common resources.arrow_forward
- Explain the concept of externalities; include an example, as well as how the government takes action to correct it.arrow_forwardWhich of the following best describes a freeway? a) Private good b) Common property resource c) Public good with exclusion d) Pure public goodarrow_forwardA) Using demand and supply diagram, describe and discuss positive externality in production of a product/service. In your discussion, explain why the existence of a positive externality leads to inefficiency. B) Consider your answer in part (a), discuss two methods that the government may use to intervene in the market to eliminate the market inefficiency. In your discussion, explain which method is preferred.arrow_forward
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