Economics: Private and Public Choice
16th Edition
ISBN: 9781337642224
Author: James D. Gwartney; Richard L. Stroup; Russell S. Sobel
Publisher: Cengage Learning US
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Chapter 5, Problem 14CQ
To determine
Explain when the government intervention is considered economically efficient and when it is not.
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- What are “public goods”? Pick a government good/service that you consume, define what makes it a public good (how is its non-rival and non-excludable). As we discussed in class, the existence of externalities creates an efficiency problem in the provision of these goods and services. Unlike the private sector, State and Local Governments can intervene. Using the example of the public good, you have provided, please provide an example of an externality that will impact its provision, and detail how a government could/should intervene.arrow_forwardDescribe one function of government in the economy other than correcting externalities. Provide an example.arrow_forwardWhat is an externality? What are the possible remedies (private or government) to externalities?arrow_forward
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