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Public Goods &Government Safety Nets

A PRESENTATION BY:

DERRICK AGUIRREHOPE FOURNIERBROOKE MAHONEYJUSTIN OBERLEMICHAELA SHAWBRITTANY WATSON

+Public Goods

All governments provide

public goods.

A public good is a shared good or service in which it would be inefficient or impractical to:

1- Make consumers pay individually

2- Exclude those who did not pay for it by taxes

+Examples Of Public Goods

Cleaning Mount Rushmore

- It’s financed by a public sector.

- It’s unrealistic to have everyone pay a share upfront. Therefore, we

have taxes.

-It’s just not practical to have the private sector produce it

(highway)

+Costs and Benefits

Costs and benefits are critical in determining whether or not the government produces a public good because it determines if the benefits outweighs the costs of creating the product.

If so, government will produce the the public good

+Free Riders

A free rider is someone who is not willing to pay for a good or service but will receive the benefit of it anyway at no cost.

+National Defense

The National Guard is something that our country no doubt needs but, if given a choice, not many people would pay for it.

Taxes are imposed to allow such things to exist and cut down on “free riders.”

+Externalities

Externalities are economic side effects of a good or a service that produces costs or benefits to someone other than the person deciding how much to produce or consume.

Can be positive or negative……..

+Positive Externalities

An example of a positive externality would be the building of a new bridge for farmers to be able to transport good more easily. The positive externalities of this project could include:

Travelers being able to use the bridge

Training workers to build the bridge

increases their job skills

More traffic increases business

for nearby restaurants and

gas stations.

+Negative Externalities

There are tons of examples of negative externalities, with pollution being one of the biggest and worst. But let’s stick with the bridge. Even after the bridge is built and helping so many people, it also does some harm:

Construction lowers quality

of air in the area

Local fishing industry suffers

Competition from bridge puts

ferry company out of business

+Government Safety Net

Government safety nets are there to help those that are very young, very old, the sick, and the disabled.

These programs are made to raise the citizens standard of living, or their economic well being measured by their ability to purchase goods and services that they need and want.

The money for these programs mostly comes from the taxes of students.