Public goods have features that distinguish them from private goods. Select and drag the correct answers into the sentences below in order to complete the passage. You may use each answer once only and some answers will not be needed. One of the features that distinguishes a public good from a private good is that it is It follows that it is difficult or impossible to limit a country's use of a or force the country to contribute towards its provision. Purely policies are unlikely to be successful. non-excludable international national non-rival global public good private good

Public goods have features that distinguish them from private goods. Select and drag the correct answers into the sentences below in order to complete the passage. You may use each answer once only and some answers will not be needed. One of the features that distinguishes a public good from a private good is that it is It follows that it is difficult or impossible to limit a country's use of a or force the country to contribute towards its provision. Purely policies are unlikely to be successful. non-excludable international national non-rival global public good private good

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter6: The Economics Of Political Action

Section: Chapter Questions

Problem 3CQ

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Consider the model of a rational consumer that cares about consumption of private goods and consumption of broadcast public television (a public good). Suppose that the total level of broadcast public television provided through voluntary contributions is 10 hours of programming. Then the government decides to raise money through a tax and provide 10 hours of programming to the public. What would we predict about crowd-out of voluntary contributions to broadcast public television when government does this? How would the answer change if consumers get warm glow utility from donating to broadcast public television in addition to utility from the public television itself? (Be specific.)
Why are public goods different than private goods? Group of answer choices Public goods are rivalrous in consumption and excludable, whereas private goods are nonrivalrous in consumption and nonexcludable. Public goods are rivalrous in consumption and nonexcludable, whereas private goods are rivalrous in consumption and excludable. Public goods are nonrivalrous in consumption and nonexcludable, whereas private goods are rivalrous in consumption and excludable. Public goods are nonrivalrous in consumption and excludable, whereas private goods are rivalrous in consumption and excludable. Public goods are rivalrous in consumption and excludable, whereas private goods are nonrivalrous in consumption and excludable.
What are public goods? Describe its two characteristics and give an example of a public good. Why might the government intervene in the provision of public goods. (Please answer concisely.)
Consider an economy with n consumers, one privategood and one public good. We think of the private good as “all othergoods,” and measure it in terms of money. There are n individuals inthe economy with utility functions Ui(xi, y) = αi ln y + xi, where y is thepublic good, xi is the private good consumed by individual i = 1, . . . , n,and 0 < α1 < α2 < · · · < αn are parameters. Initial endowment of privategood of each consumer is given by wi. We donote the aggregate endowment 1of the private good by w =Pi wi. The cost of producing the public good is c(y) = cy for some c > 0. Find the optimal provision of the public good as well as how much is provided under voluntary contributions.
Which one of the following is a definition of a merit good? A) Services which can only be provided by the government through taxesB) Goods which provide cear social and private benefits to consumersC) A good which can be produced by the market but would likely be under-consumedD) Goods which are beneficial in consumption but consumers are unaware of the extent of the benefitsE) Goods which are not capable of being provided by the market because they are excludable and rival Merit goods are an example of which of the following problems in economics:A) Free riderB) Principal-agentC) Tragedy of the CommonsD) Intertemporal choiceE) Excludable, non-rival goods provision De-merit goods have characteristics that if left the market mechanism, they are over consumed and impose private costs on the individual consume them, and also have wider social costs. Which of the following ways in which a government might seek to reduce consumption of of merit costs? Check all the apply A) Impose…
The depletion of the ozone layer is attributed to the emission of Chlorofluorocarbons (CFCs). Before 1990, the use of coolants in refrigerators such as Freon released a significant amount of CFCs. Given the above scenario, is the equilibrium level of refrigerators produced prior to 1990 in the market “too much” or “too little” compared to the social optimum? Explain why this occurs. Support your answer by drawing the private and social, marginal cost and marginal benefit curves for refrigerators. Identify the deadweight loss if any exists. Identify a regulation that the government can use to achieve the socially optimal level of refrigerators. Explain how this regulation works. Explain how the Coase theorem could hypothetically work to achieve the optimal level of CFCs emissions in this context. Enumerate at least one major drawback that hinders the creation of a market for CFCs without any third party regulators in the real world. Assume that the marginal savings for refrigerator…
Consider two groups of citizens, each group can either choose to drive x = d or to take public transport x = p. The first group, group 1, enjoys driving and has the following benefit from using their car within the ULEZ area: B1(x1 = d) = 18. The second group, group 2, does not enjoy driving and has a benefit of B2(x2 = d) = 0 from driving their car. If they don’t drive, citizens can use public transport to get around. The benefit of doing so is the same for both groups: B1(x1 = p) = B2(x2 = p) = 10. Both groups drive cars that do not meet the ULEZ requirements and therefore create excessive pollution. For simplicity, we consider that pollution, and the health problems it induces, are the main cost of driving. This cost is imposed on both groups and is equal to Ci(x1 = d, x2 = d) = 10 if both groups drive, Ci(x1 = p, x2 = d) = Ci(x1 = d, x2 = p) = 5 if only one group drives and Ci(x1 = p, x2 = p) = 0 if neither group drives, where i represents either group 1 or group 2. The utility of…
Consider two groups of citizens, each group can either choose to drive x = d or to take public transport x = p. The first group, group 1, enjoys driving and has the following benefit from using their car within the ULEZ area: B1(x1 = d) = 18. The second group, group 2, does not enjoy driving and has a benefit of B2(x2 = d) = 0 from driving their car. If they don’t drive, citizens can use public transport to get around. The benefit of doing so is the same for both groups: B1(x1 = p) = B2(x2 = p) = 10. Both groups drive cars that do not meet the ULEZ requirements and therefore create excessive pollution. For simplicity, we consider that pollution, and the health problems it induces, are the main cost of driving. This cost is imposed on both groups and is equal to Ci(x1 = d, x2 = d) = 10 if both groups drive, Ci(x1 = p, x2 = d) = Ci(x1 = d, x2 = p) = 5 if only one group drives and Ci(x1 = p, x2 = p) = 0 if neither group drives, where i represents either group 1 or group 2. The utility of…
Consider two groups of citizens, each group can either choose to drive x = d or to take public transport x = p. The first group, group 1, enjoys driving and has the following benefit from using their car within the ULEZ area: B1(x1 = d) = 18. The second group, group 2, does not enjoy driving and has a benefit of B2(x2 = d) = 0 from driving their car. If they don’t drive, citizens can use public transport to get around. The benefit of doing so is the same for both groups: B1(x1 = p) = B2(x2 = p) = 10. Both groups drive cars that do not meet the ULEZ requirements and therefore create excessive pollution. For simplicity, we consider that pollution, and the health problems it induces, are the main cost of driving. This cost is imposed on both groups and is equal to Ci(x1 = d, x2 = d) = 10 if both groups drive, Ci(x1 = p, x2 = d) = Ci(x1 = d, x2 = p) = 5 if only one group drives and Ci(x1 = p, x2 = p) = 0 if neither group drives, where i represents either group 1 or group 2. The utility of…
Consider two groups of citizens, each group can either choose to drive x = d or to take public transport x = p. The first group, group 1, enjoys driving and has the following benefit from using their car within the ULEZ area: B1(x1 = d) = 18. The second group, group 2, does not enjoy driving and has a benefit of B2(x2 = d) = 0 from driving their car. If they don’t drive, citizens can use public transport to get around. The benefit of doing so is the same for both groups: B1(x1 = p) = B2(x2 = p) = 10. Both groups drive cars that do not meet the ULEZ requirements and therefore create excessive pollution. For simplicity, we consider that pollution, and the health problems it induces, are the main cost of driving. This cost is imposed on both groups and is equal to Ci(x1 = d, x2 = d) = 10 if both groups drive, Ci(x1 = p, x2 = d) = Ci(x1 = d, x2 = p) = 5 if only one group drives and Ci(x1 = p, x2 = p) = 0 if neither group drives, where i represents either group 1 or group 2. The utility of…
Answer the following questions for the given example: Using water pumps in homes (a) Does an externality exist? If so, is it positive/negative (or both) (b) Use Coase’s framework to identify the cause of the externality (c) If an externality exists, determine whether the Coase theorem applies (i.e. is it possible/feasible to assign property rights and solve the problem?). Provide reasoning. (d) If an externality exists and the Coase theorem does not apply, discuss a government/institutional solution that can mitigate the problem of externality. Provide reasoning.
Consider two groups of citizens, each group can either choose to drive x = d or to take public transport x = p. The first group, group 1, enjoys driving and has the following benefit from using their car within the area: B1(x1 = d) = 18. The second group, group 2, does not enjoy driving and has a benefit of B2(x2 = d) = 0 from driving their car. If they don’t drive, citizens can use public transport to get around. The benefit of doing so is the same for both groups: B1(x1 = p) = B2(x2 = p) = 10. Both groups drive cars that do not meet the requirements and therefore create excessive pollution. Cost is imposed on both groups and is equal to Ci(x1 = d,x2 =d)=10 if both groups drive, Ci(x1 =p,x2 =d)=Ci(x1 =d,x2 =p)=5 if only one group drives and Ci(x1 = p, x2 = p) = 0 if neither group drives, where i represents either group 1 or group 2. The utility of each group from choosing action xi is equal to the benefits minus the costs: Ui(xi,xj)=Bi(xi)−Ci(xi,xj), where i∈{1,2}. 1. Compute the…