Public Goods

What is critical in determining whether something is produced as a public good?

• whether the market has the resources to provide it

• whether the benefits to society are greater than the total cost

• whether the government needs to use tax money to provide it

• whether the benefits are limited to the poor

What is one reason that firefighter services are considered a public good?

• Everyone in the community benefits from it.

• Nobody in the community has to pay for it.

• Private firms make a profit from producing it

• Individual citizens pay directly for it.

Public goods are examples of market failure, because producing these goods in the free market

• shows that the free enterprise system cannot distribute resources.

• helps entrepreneurs learn how to distribute public resources.

• does not allow for the efficient distribution of resources.

• encourages private businesses to distribute resources efficiently.

Which of the following explains why a city fireworks display on the Fourth of July is provided as a public good?

• Fireworks displays usually take place in a public area.

• Fireworks are a scarce resource.

• Nonpayers cannot be prevented from seeing the fireworks.

• Each consumer pays a fee to see the fireworks.

National Security is an example of what type of Good?

• Private Good

• Free Rider Problem

• Excludable Good

• Public Good

non-excludable and nonrival; may not necessarily be a physical good that you can hold in your hands is referring to ____________.

• Market Failure

• Public Good

• Private Good

• None of the Above

Which of these statements describe the free rider problem?

• Free riders enjoy the benefit of a public good without contributing to its creation

• Free riders contribute to the degradation of a public good without paying for it

• The free rider problem occurs because some goods are non-rivalrous and non-excludable

Why has the United States space program been operated as a public good?

• Private enterprise does not have the technical skill needed to build the rockets that carry astronauts into space.

• The profit incentive for a private company to establish and run its own space program is too great.

• The inability of the American space program to land an astronaut on Mars is an example of market failure.

• It is impractical to exclude nonpayers from enjoying the scientific and technological benefits of the space program.

What are public goods and how are they funded?

What might be the economic benefit of the government providing a public good rather than the private sector?

• decreased prices for the good

• decreased cost for the good

• increased taxes needed to provide the good

• greater efficiency in providing the good