Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Question
Chapter 16.2, Problem 3RQ
To determine
Preventing an efficient provision of public good.
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In what sense does the demand curve for a pure public good differ from that of a pure private good ?
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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.
Chapter 16 Solutions
Macroeconomics
Ch. 16.1 - Prob. 1RQCh. 16.1 - Prob. 2RQCh. 16.1 - Prob. 3RQCh. 16.1 - Prob. 4RQCh. 16.2 - Prob. 1RQCh. 16.2 - Prob. 2RQCh. 16.2 - Prob. 3RQCh. 16.2 - Prob. 4RQCh. 16.3 - Prob. 1RQCh. 16.3 - Prob. 2RQ
Ch. 16.3 - Prob. 3RQCh. 16.3 - Prob. 4RQCh. 16.3 - Prob. 5RQCh. 16 - Prob. 1SPACh. 16 - Prob. 2SPACh. 16 - Prob. 3SPACh. 16 - Prob. 4SPACh. 16 - Prob. 5SPACh. 16 - Prob. 6SPACh. 16 - Prob. 7SPACh. 16 - Prob. 8SPACh. 16 - Prob. 9SPACh. 16 - The Economics of Healthcare (Study plan 16.3) Use...Ch. 16 - Prob. 11APACh. 16 - Prob. 12APACh. 16 - Prob. 13APACh. 16 - Prob. 14APACh. 16 - Prob. 15APACh. 16 - Prob. 16APACh. 16 - Prob. 17APACh. 16 - Prob. 18APACh. 16 - Prob. 19APACh. 16 - Prob. 20APACh. 16 - Prob. 21APACh. 16 - Prob. 22APACh. 16 - Prob. 23APACh. 16 - Prob. 24APA
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- (Optimal Provision of Public Goods) Using at least two individual consumers, show how the market demand curve is derived from individual demand curves (a) for a private good and (b) for a public good. Once you have derived the market demand curve in each case, introduce a market supply curve and then show the optimal level of production.arrow_forwardWhat information do we need to find the optimal quantity of public goods? We may want to make the tax burden proportional to benefits from a public good. What problem might arise if we try this approach?arrow_forwardWhat are Public Goods and Common resources? Describe in your analysis the issues that governments face as a result of these goodsarrow_forward
- a) Identify two public goods and explain why they are public goods b) Why does a positive externality create a market failure and how can this market failure be solved by the government? Fully explain your answer.arrow_forwardWhat are the two key characteristics of a public good? What is an example of a public good? What is the problem with leaving the provision of public goods up to the market system? What is the solution?arrow_forwardDifferentiate and explain between public wants and private wantsarrow_forward
- Production in the private market is inefficient. Why? What is the condition for efficiency in the output of a public good? How is an efficient output identified graphically?arrow_forwardUse your demand schedule for a public good, determined in question 1, and the following supply schedule to ascertain the optimal quantity of this public good. Why is this the optimal quantity?arrow_forwardDefine public goodsarrow_forward
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