Exam 4: Public Goods

Suppose there is a public good that has market supply characterized by the equation X = (P/3)- (32/3).Suppose further that market demand for this good can be characterized by the equation X = 25 -P.Find the equilibrium quantity of the public good that will be supplied.

A pure private good is

The Global Positioning System (GPS)is an example of a good that is both non-rival and excludable good.

A ________ is a person who wants to enjoy the benefits of a public good without contributing his or her marginal benefit to the cost of financing the amount made.

Summing demand curves horizontally sends market ______________ to individuals,while summing vertically sends market ______________ to individuals.

Some people do not engage in free riding,even when there is no cost or chance or reprisal.Discuss why?

Congestible public goods

When those that do not contribute to the costs of a public good are denied use,this is a case of

Private goods are always provided by the private sector.

Some economists believe that public schools would improve if they were subjected to competition.Discuss the pros and cons of this idea.

Pure public goods involve positive externalities.

Use the answer you found when adding market demand curves vertically in Question 18 above to find the market equilibrium quantity if the market supply is constant at 4 units.

Equilibrium for public goods is characterized by

The free rider problem causes less than optimal production of a public good.