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1. A clever economics student writes up a wonderful set of notes that can help everyone studying economics to earn a higher grade. The student posts these notes on a website. Are these notes a public good? Using the two key traits of a public good, explain your answer.

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Kritika Krishnakumar
Kritika KrishnakumarLv10
28 Sep 2019

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Related questions

List the public-good aspects (if any) of the following goods:

a. Safety.

1.It involves choices the public makes, such as safe driving, that enhances their own safety.

2.When one person acts in a safe manner, it affects others not included in the decision to act safely. It reduces risks to others.

3.Safety has no public-good aspects, since it is both rival and excludable.

4. If safety provides a safe environment, it is provided for all people, and one person enjoying safety does not preclude others from benefiting from that safety.

b. Street names.

1.Naming streets allows people to orient themselves in towns and facilitates communication. Since the government is in charge of naming streets, they are a public good.

2.Naming streets is not a public good because it is up to each person to navigate maps and streets. Naming streets allows people to orient themselves in towns and facilitates communication. Although everyone benefits from street names, no one wants to pay the costs if some people are free riders. The government eliminates the free rider problem by using tax dollars to name streets, thus creating a public good.

3.Naming streets has no public-good aspects, since street names are rival (unique to towns) and excludable (once used in a town, it cannot be used again).

4. Naming streets allows people to orient themselves in towns and facilitates communication. Once a street is named, it benefits all people. No one can be excluded from referring to that name. In addition, one person using that street name does not preclude others from referring to that street.

C. A steak dinner.

1.A steak dinner is a public good because an entire cow has to be butchered to produce the steak. Other people receive the remaining meat, making the steak a public good.

2.A steak dinner is a public good because cows graze on public land. In this way, farmers are often free riders and the meat they produce is actually a public good.

3.A steak dinner has no public-good aspects, since it is both rival (if one person eats it, no one else can) and excludable (if you don't pay for it, you don't get it).

4. A steak dinner is a public good because the government subsidizes meat farms. In other words, the price of a steak is partly paid for by taxes, making the steak itself a public good.

1. Students at expensive liberal arts colleges can often take courses at an adjacent public university at no additional charge. One of liberal arts college professors tells his students that it would make no sense to take courses from the public university because they would be losing the money they paid for tuition at the pricey private college. Given that a student has already paid her tuition at the liberal arts college, but judges that a course offering at the public university is better for her, she should take the course from:

a.the liberal arts college because she needs to get her money’s worth from the high tuition she has already paid.

b. the public university because the added cost of attending the public university course is zero.

c.The liberal arts college because the average tuition cost per course will rise if she takes less courses at the private school.

d. the pubic university because average tuition cost at the public university is lower than at the private college.

2. Using the reasoning of behavioral economics, which of the reasons below might best explain why companiesoffer a30-day-no-questions-asked return policy? Such a policy may convince a customer who otherwise might not make a purchase to take the product home and then the product:

a.becomes part of the customer’sendowmentat which pointloss aversionkicks in.

b. becomes a decoy and the customer decides to purchase multiple units of the good.

c. purchase price becomes a sunk cost and the customer correctly ignores it and views the good as free.

d. becomes an anchor upon which the customer inadequately adjusts for quality and ends up keeping the good even though it’s inferior to other alternatives.

Step 1: Analyze the following public goods and services. For each of the following public goods, analyze the external benefits to society and their efficient delivery: Firefighting service; U.S. Route 66; Public education.

Step 2: How do the people in charge of each of these services come to the decisions that provide an efficient quantity of each public good or service? What are the external benefits that each public good or service provides? Are there other public goods or services that you believe have external benefits but fall victim to the free-rider problem?

Step 3: Use your analysis to answer questions. In a two-page (500-word) document, address the following questions using the information you have gathered from your analysis in.

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