Question

When governments produce public goods, they can simultaneously solve old problems and create new ones’. Do you agree or not? Justify your answer.

Answer 1

Government produce public goods inorder to maximise the welfatw of the citizens and mostly to cater the needy sections of the society. However, they are important from the welfare perspective and not all the times they are useful as even the affordable sections take advantage of it and this results in the downfall of certain markets all in all. This is the reason why though they eliminate some old problems can get to create new ones. Therefore public goods must be mandated or strictly monitored in order to protect the markets.