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Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050

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BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050
Textbook Problem

Think about the goods and services provided by your local government.

a. Using the classification in Figure 1, explain which category each of the following goods falls into:

• police protection

• snow plowing

• education

• rural roads

• city streets

b. Why do you think the government provides items that are not public goods?

Subpart (a):

To determine
Nature of goods and services.

Explanation

Option (a): Police protection is not a rival in consumption and is excludable, so it is a club good. The consumption of these commodities will not bring down its availability to the other consumers.

Option (b): When the street is plowed then it becomes non-excludable but after a big snowfall it is still a rival in consumption. This is because if one street is plowed, then another street will be left without plowing. So, snow plowing needs to be considered as a common resource.

Option (c): If there is someone who doesn’t pay for the services, then they can be barred from attending classes; so education is excludable. If there is an extra student in any class, then the benefits to others reduces; so it is also a rival in consumption...

Subpart (b):

To determine
Reason for providing non-public goods by government.

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