Question

PROBLEMS AND APPLICATIONS 1. 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 e snow plowing , education e rural roads city streets b. Why do you think the government provides items that are not public goods? 2. Both public goods and common resources involve externalities a. Are the externalities associated with public goods generally positive or negative? Use examples in your answer. Is the free-market quantity of public

Answer 1

1. According to the data given, the accompanying merchandise can be

classified into classifications given underneath

1. Police protection – Public Good

This is on the grounds that open security is given to everybody. They are non-rival and non-excludable in nature. Anybody's utilization can't influence the utilization of another's utilization for the administration.

2. Snow plowing – Club Good

This is on the grounds that they are excludable however not equal in nature.

Any individual who pays for the administration just gets the office.

3. Education – Public Good

It is non-excludable and non-rival in nature.

4. Rural roads – Public Good

Everybody has a measure up to access to the streets. Thus, nobody can be barred from its utilization. They are non-rival too

5. City Street – Public Good

They are non-rival and non-excludable in nature

2  At the point when an administration gives a decent, they charge a lower cost as contrasted with private firms. Along these lines, if a private area takes up the creation for a venture with a greater expense, they will in general charge a more expensive rate. In addition, a private division is less eager to take up an undertaking if there is less return in the future. Accordingly the government ventures in and produce the great and give it to open at less expensive rates