Understanding Public Goods and Government Role in Provision
Explore the concept of public goods and the government's role in providing them. Learn about terms like free rider, positive and negative externalities, and delve into examples of market failures. Discover how public goods are funded through tax dollars and why they are essential for society.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
You are allowed to download the files provided on this website for personal or commercial use, subject to the condition that they are used lawfully. All files are the property of their respective owners.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.
E N D
Presentation Transcript
Providing Public Goods In this lesson, students will examine the government s role in providing public goods. Students will be able to define and/or identify the following terms: Public Good Free Rider Positive Externality Negative Externality
Do Now: 3/13/19 What are some ways the government provides a safety net for people in the U.S.A.? Welfare, Social Security, Medicaid, Medicare, VA
Americans need roads but no private company creates roads.
A Market Failure A market failure occurs when the market does not provide the goods or services consumers need. Of course, Adam Smith suggested that the market would always fix itself but that doesn t always happen. Coca-Cola creates soda but not libraries. Why?
Public Goods When a market failure occurs, people expect the government to provide the needed good or service through the use of tax dollars. A public good is a good or service created by the government through tax dollars. Public schools, military defense, and public libraries are examples of public goods.
Free Rider A free rider is a person who would not choose to pay for a good or service but would use it anyway. To ensure that citizens are not free riders, the government insists that all citizens pay their taxes. It is important to note that public goods are paid for with tax dollars.
If you watched Sesame Street but never made a donation to PBS, you were a free rider.
Negative Externalities Sometimes a good or service has an unintended side effect. This is called an externality. An example of this is pollution from automobiles. The manufacturers of automobiles did not intend to pollute the atmosphere. Therefore, pollution is a negative externality.
Automobile pollution is a negative externality. It is a negative side effect.
Positive Externalities Sometimes a good or service has a positive side effect. An example of a positive externality is the cancer fighting properties in tomato sauce. Tomato sauce was created for spaghetti not to fight cancer.
The government tries to create positive externalities in its creation of public schools.
Questions for Reflection: What is a market failure? How does the government address a market failure? Provide two examples of public goods. What does the government do to prevent citizens from being free riders? Provide examples of positive and negative externalities.
