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3 Dec 2018

Problem 2

Compare and contrast a public good versus a private good. What are the principal characteristics of each?

What are the two key characteristics of public goods? Is there a free rider problem when it comes to public goods? Why?

Do you consider your local police force a public good or a private good? How come? How about your local TV service? Please explain your answer.

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Related questions

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.

lemonelephant587

Question 3

We saw in class that the same good can fall in different categories (public/private/club/common resource) depending on circumstances. An example of such a good would be watching a movie at the theater. If a lot of people want to watch it, the movie is a _________. If very few people want to watch it (to the point where a room could not even be filled), the movie is likely to be a _______.

A. a common resource; a public good

B. a public good; a common resource

C. a private good; a club good

D. a club good; a private good

3 points

Question 4

Which of the following statements about the free-rider problem is not true?

A. Individuals have an incentive to free-ride when the good is not excludable.

B. The kinds of goods for which the free rider problem arises are common resources and public good.

C. Markets for goods for which there is a free-rider problem are inefficient because not enough of the good is produced.

D. Goods for which the free-rider problem exists tend to be over provided relative to what would be optimal.

4 points

Question 5

To achieve the efficient provision of public goods, the

A. market should be allowed to operate without government intervention.

B. government must limit the provision of those goods.

C. government must tax producers of those goods.

D. government must either provide those goods or subsidize their production.

3 points

Question 6

Which of the following statements about public goods is not true?

A. Because people cannot be excluded from their consumption and thus have no incentive to pay for them, public goods are underprovided by the market.

B. Efficiency requires that the government provide or fund (subsidize) the provision of all public goods.

C. Efficiency requires that the government provide or fund only the public goods that create more benefits than costs to society.

D. In reality, it is hard to provide public goods efficiently.

3 points

Question 7

Public goods must be provided by the government as the market on its own will fail to provide them. However, even with government provision it is very hard to achieve efficiency. Why?

A. In reality, it is very hard (if not impossible) to accurately estimate the benefits of providing a public good.

B. A. In reality, there can be overruns in the cost of providing the public good.

C. Government decisions about which public goods to provide can be influenced by lobbying by interest groups.

D. All of the above are true.

4 points

Question 8

Which of the following is not a common resource?

A. congested roads

B. clean water

C. wild life, which hunters want to hunt and others want to view.

D. a fireworks display.

3 points

Question 9

Many species of animals must be protected by law to keep them from extinction. Why are cows not one of these endangered species even though there is such a high demand for beef?

A. Cows reproduce at a high rate and have adapted well to their environment.

B. Public policies protect cows from predators and diseases.

C. Cows are privately owned (private goods), whereas many endangered species are owned by no one (common resources).

D.There is a natural ecological balance between the birth rate of cows and human consumption.

3 points

Question 10

Which of the following statements about common resources is not true?

A. Due to the free-rider problem, common resources tend to be overused.

B. Because there is rivalry in the consumption of common resources, whenever one person uses a common resource it is imposing a negative externality on others who might also want to use it.

C. There are no private solutions to the management of common resources.

D. One of the solutions that ensures that common resources are properly managed is their privatization.

3 points

Question 11

In our analysis of the firmâs behavior and goals, when we talk about cost, we include _________, and when we talk about profit, we mean ________.

A. Explicit costs only; economic profit

B. Implicit costs only; economic profit

C. Implicit costs only; accounting profit

D. Explicit + implicit costs; economic profit

E. Explicit + implicit costs; accounting profit

3 points

Question 12

One of the differences between explicit and implicit costs is that

A. explicit costs must be greater than implicit costs.

B. explicit costs do not require a direct monetary outlay, whereas implicit costs do.

C. implicit costs do not require a direct monetary outlay, whereas explicit costs do.

D. implicit costs must be greater than explicit costs.

3 points

Question 13

Which of the following is FALSE:

A. If accounting profit is zero, then economic profit is negative

B. Economic profit takes cost the opportunity cost of time and capital into account

C. Economic Profit = Accounting Profit + Implicit Cost

D. Economic Profit = Accounting Profit â Implicit Cost

3 points

Question 14

Which of the following is an example of an implicit cost?

(i) the owner of a firm forgoing an opportunity to earn a large salary working in Wall Street

(ii) interest paid on the firm's debt

(iii) rent paid by the firm to lease office space

A. (ii) and (iii) only

B. (i) and (iii) only

C. (i) only

D. (iii) only

3 points

sapphirekangaroo316

HELP! PLEASE HELP!!... The City of Ocelot was recently incorporated and is developing its administrative systems. A major motivation for creating the new city was the perception that the county commissioners had been less than enthusiastic about providing services to an area that tended to vote for their opponents. One pressing problem that requires immediate attention has been inadequate drainage. Unexpectedly high rainfall the last two years has generated large mosquito populations, and citizens have indicated a willingness to support taxation required for the construction of an expanded drainage system plus other measures to deal with the insects. Although the bulk of mosquito breeding occurs in the poorer parts of town, the wealthier areas are within the flight range of the insects. The population of Ocelot is about 30,000 with a range of incomes from very wealthy to about 10% of the population below the poverty level. Housing ranges from high-end homes and condominiums to publicly subsidized apartments. The ethnic distribution of the population is 65% Anglo-American, 15% Hispanic-American, 15% African-American, 3% Asian-American, and 2% Native American. The concept of public goods is frequently offered as a motivation for governmental operations. Discuss how the situation in the scenario illustrates demand for public goods, including the free-rider concept in relation to taxation. The discipline of public administration has traditionally called for separating policy from politics. Deborah Stone argues in The Policy Paradox that the ârationality projectâ has failed, but this view is not shared by Kraft & Furlong or Kettl. Discuss how politics will influence the development of the drainage project for the City of Ocelot, and relate the readings to the scenario. Which author(s) do you believe offers the most insightful representation of the forces involved in the scenario, and explain your answer? A group of citizens is calling for the new city to be run âlike a businessâ in the expectation this will lead to more efficient and effective delivery of services. Discuss the applicability of private sector techniques to the development of the drainage project for the city. In particular, what are some of the similarities and differences between the public and private sectors that will affect the project? One way to approach this may be to compare the constraints and incentives for Ocelot Director of Public Works Danny Velinski to those for Louis Sedgwick, CEO of a private sector construction company bidding for the contract. Two distinguished professors of organizational theory are eager to study the development of the new Cityâs administrative system. Dr. Virgil Hilts emphasizes systems theory in his analysis while Dr. Bob Hendley approaches organizations from the human relations school of thought. Discuss how each professor will approach operations in terms of the factors they will consider important in their analysis, and offer your view of the strengths and weaknesses of each approach. Which perspective do you believe offers greater explanation?