Question

SHORT ANSWERS FOR THESE QUESTIONS, THEY CAN BE GOOGLED WORD-FOR-WORD. THEY'RE JUST NOTES, DOESN'T HAVE TO...

SHORT ANSWERS FOR THESE QUESTIONS, THEY CAN BE GOOGLED WORD-FOR-WORD. THEY'RE JUST NOTES, DOESN'T HAVE TO BE IN YOUR OWN WORDS... JUST *ACCURATE*. KEEP EM AS SIMPLE AS *NEEDED*.

5. What are private goods? Who can easily handle the markets for private goods?

6. What are public goods? What distinguishes public goods from private goods?

7. What is the relationship between exclušion principle and the Free-Rider problem?

8. Why are public goods typically underproduced?

9. What are examples of negative externalities? Provide a couple of examples

10. What are examples of negative externalities? Provide a couple of examples

11. In a free market system, the cost and benefits of externalities are not included in the price of a

product. What does this mean?

12. The combined operation of the market system and government has provided an equitable

distribution of income in US. True or False. Why?

13. According to chart in chapter 4 of your textbook, since 1950 in US the percentage contribution

of Federal Government purchases in GDP has decreased, the percentage contribution of State and

Local Governments in purchases has increased, and the total contribution of government has

increased slightly. True or False. How do you think it will be in the future and Why?

14. What is a progressive tax? Provide specific examples

15. What is meant by government failure?

Homework Answers

Answer #1

5. A private good is a product that must be purchased to be consumed , and consumption by one individual prevents another individual from buying that product. In simple terms, if there exist a competition between individuals to obtain the good and consume it, such a good is known as private good.

Example: Different goods have elements of private and public goods. Like a professor's BMW can be a private good because he dont allow anyone else to drive or ride his car.

As we said earlier, there are different possibilities for handling a private market. it can be fully private or it can be public private partnership, that will be handling the market for the benefits.

6. A public good is generally open to use and consumption by one does not hamper or deter any other person consuming it. In simple words, many public goods are consumed at no cost. Example: the fountain water that we drink water from, public television even the FM or the AM.

The main thing that distinguishes it from private good is its availability and the free cost attitude.

7.Exclusion principle basically focusses on the revenue on the profit that one is making from selling some items, whereas free rider problem is associated with public goods. What happens is that one private good is produced to make a profit whereas one public good is freely accessible. Often private goods have finite availability, making them exculdable in nature. For example, only a certain number of certain pair of designer shoes are produced, so not everyone can wear the same ones. The majority of private goods must be purchased for a cost. This cost offsets the fact that the use of the good by the one prevents the use of good by the another.

Whereas, for public good nothing such thing happens, and it generates the free rider problem.It represnts the burden on a shared resource that is created by its use or overuse by people who aren't paying theri fair share for it or aren't paying anything at all. It is consudered as one of the failures of the conventional free market sysytem.

8.Public goods are mostly underproduced because of the fact that it initiates the free rider problem, where a good share of it always overused by the people who donates nothing and it causes a burden on the state . It can be overcome by different methods such as imposong a small fee on everyone, thus not making it free as it should be or governments can turn their public resources into private resources and many others.

9/10. Examples like waste, arise from consumption while other externalities like carbon emissions from factories, arise from production. Also factors like no one owns the ocean and they are not private property of anyone, so ships pollute the sea without the fear of being taken to court.

11. The major reason for not including the externalities in the free market system is the addition of charges levied on the products i.e. if any externalities are added the prices will go up and it won't be free anyome and the people habe to pay more money than ever. Thus to prevent such occurrence, this is not included.

12.It is False. Based on different findings it has been found that income and other inequalities are quite high in US than its neighbouring countries. If one look at the Lorenz curve and Gini coefficient for US, he/ she would find that ineqaulity is prevalent for mostly all in US.

13.CHART IS MISSING.

14.Progressive tax in simpler terms is one which imposes a lower tax rate for low income earners and high tax rate for high income earners, making it based on tax payer's ability to pay. That means it takes large percentage from high income groups and low from lower income groups.

Example : The overall federal tax system is progressive,that is like the individual income tax as well as corporate income tax.

15.Government failure related to taxation can be many because one of the many factors is complexity.The exploitation of loopholes leads to calls for new legislation which in turn makes the law more complex. In short, complexity begets more complexity. This law can be broken dwon by true tax simplification, followed by ongoing legislative and adminidtrative discipline to avoid compelxity creep.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. Explain two main reasons why we need to study public finance 2. Distinguish between the...
1. Explain two main reasons why we need to study public finance 2. Distinguish between the “organic view” and “mechanistic view” of the existence of government 3. Explain the concept of market failure and discuss five reasons why there is market failure 4. What is meant by market failure? Identify and discuss four conditions under which the market fails to optimally allocate resources. 5. What is meant by the term government failure and explain five reasons why there may be...
1.Taxes can be justified if the government uses the revenue to (i) provide public goods such...
1.Taxes can be justified if the government uses the revenue to (i) provide public goods such as national defense. (ii) clean up negative externalities such as water pollution. (iii) regulate a common resource such as fish in a public lake. (iv) provide goods with positive externalities such as medical research. A) (ii) only B) (ii) and (iii) only C) (i), (ii), and (iii) only D) (i), (ii), (iii), and (iv) 2.A person's tax liability refers to A) the percentage of...
Lebanon’s infrastructurewas extremelydamaged by the 1975-1990 civil war. The quality of public utilities decayedfurther after the...
Lebanon’s infrastructurewas extremelydamaged by the 1975-1990 civil war. The quality of public utilities decayedfurther after the war in 2006 and the Syrian war in 2011.Since then, Lebanonhas lacked sustainableelectricity, education, health, transport and other basic networksdue to the chronic inability of successive governments to manage and plan them.As a result, the growth of the economy has been severely constrained.The public company Electricite du Liban (EdL) weighs heavily on the government’s expenditures. Subsidies to EdL stood at an average of $1.85B...
URGENT!! 6 Multiple Choice Questions with the correct answers from the article below. Authenticity has become...
URGENT!! 6 Multiple Choice Questions with the correct answers from the article below. Authenticity has become the gold standard for leadership. But a simplistic understanding of what it means can hinder your growth and limit your impact. Consider Cynthia, a general manager in a health care organization. Her promotion into that role increased her direct reports 10-fold and expanded the range of businesses she oversaw—and she felt a little shaky about making such a big leap. A strong believer in...
If the overall balance in the balance of payments account is in _____, there can be...
If the overall balance in the balance of payments account is in _____, there can be an accumulation of official reserve assets by the country or a decrease in foreign official reserve holdings of the country's assets. surplus deficit equilibrium remission Answer: The current account balance does NOT equal: the difference between domestic product and domestic expenditure. the difference between national saving and domestic investment. net foreign investment. the difference between government saving and government investment. Answer: A nation is...
1.) True or False? For all societies, resources are scarce, and technology is limited, while people’s...
1.) True or False? For all societies, resources are scarce, and technology is limited, while people’s wants and needs for goods and services seem to be unlimited. (2 points) 2.) (1 point) Adam Smith’s “invisible hand” refers to a.) the subtle and often hidden methods that businesses use to profit at consumers’ expense. b.) the ability of free markets to reach desirable outcomes, despite the self-interest of market participants. c.) the ability of government regulations to benefit consumers, even if...
INTRODUCTION TO AUDITING ALCHEMY Auditing Alchemy (AA) is a privately-held manufacturing company established in 1998. AA...
INTRODUCTION TO AUDITING ALCHEMY Auditing Alchemy (AA) is a privately-held manufacturing company established in 1998. AA manufactures spheres that are used in a variety of industrial applications. AA is the top sphere producer in the industry and also sells spheres to the U.S. government and other aerospace contracts. The spheres are sold in two forms: green and gold. A third form of sphere, red, is also a by-product of the manufacturing process. Although it is not publicly traded, AA has...
Question: summarize what you have read and how you believe (based on what we've studied so...
Question: summarize what you have read and how you believe (based on what we've studied so far) that topic should be approached from a law and policy perspective. Introduction The U.S.-Cuba relationship has been plagued by distrust and antagonism since 1959, the year Fidel Castro overthrew a U.S.-backed regime in Havana and established a socialist state allied with the Soviet Union. During the half century that followed, successive U.S. administrations pursued policies intended to isolate the island country economically and...
QUESTION 1 Which one of the following would NOT be necessary for an offer to have...
QUESTION 1 Which one of the following would NOT be necessary for an offer to have legal standing? A. The language must reflect the intent to become a party to a contract. B. All of the conditions under which the offer would be terminated must be identified. C. All the significant terms and/or conditions must be contained in the offer. D. The offer must be effectively communicated to the other party. 3 points    QUESTION 2 Which one of the...
Argentina and Ecuador: Understanding the Currency Crisis While fiscal policy is never far from the mind...
Argentina and Ecuador: Understanding the Currency Crisis While fiscal policy is never far from the mind of your average Argentine, who remembers the tough times and hyperinflation of the 1980s, the events of 2001 and 2002 have brought fiscal policy back to the forefront of public concern. Though the early 1990s may have been characterized by financial optimism, Argentina has been in a recession since Brazil's 1998 monetary crisis sent shockwaves across the regional and global markets. In early 2002,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT