The situation described in the news article illustrates a possible conflict between finding alternative sources of energy and A protecting the environment. B funding national defense. C enhancing the quality of education. D promoting economic equity.

Name two public goods and explain why they are public goods.

Consider two approaches to reducing emissions of CO2 into the environment from manufacturing industries in the United States. In the first approach, the U.S. government makes it a policy to use only predetermined technologies. In the second approach, the U.S. government determines which technologies are cleaner and subsidizes their use. Of the two approaches, which is the command-and-control policy?

In what ways (it) company investments in research and development create positive externalities?

In the tradeoff between economic output and environmental protection, what do the combinations on the protection possibility curve represent?

What does a point inside the production possibility frontier represent?

The Gizmo Company is planning to develop new household gadgets. Table 13.4 shows the companys demand for financial capital for research and development of these gadgets, based on expected rates of return from sales. Now, say that every investment would have an additional 5 social benefit—that is, an investment that pays at least a 6 return to the Gizmo Company will pay at least an 11 return for society as a whole; an investment that pays at least 7 for the Gizmo Company will pay at least 12 for society as a whole, and so on. Answer the questions that follow based on this information. If the going interest rate is 9, how much will Gizmo invest in R. How much will the firm invest if it also receives the social benefits of its investment? (Add an additional 5 return on all levels of investment.)

Radio stations, tornado sirens, light houses, and street lights are all public goods in that all are nonrivalrous and nonexclusionary. Therefore why does the government provide tornado sirens, street lights and light houses but not radio stations (other than PBS stations)?

Are the following goods non-rival in consumption? slice of pizza laptop computer public radio ice cream cone

Education provides both private benefits to those who receive it and broader social benefits for the economy as a whole. Think about the types of policies a government can follow to address the issue of positive spillovers in technology and then suggest a parallel set of policies that governments could follow for addressing positive externalities in education.