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The role of government in paying for public goods

The key insight in paying for public goods is to find a way of assuring that everyone will make a contribution and to prevent free riders. For example, if people come together through the political process and agree to pay taxes and make group decisions about the quantity of public goods, they can defeat the free rider problem by requiring, through the law, that everyone contributes.

However, government spending and taxes are not the only way to provide public goods. In some cases, markets can produce public goods. For example, think about radio. It is nonexcludable, since once the radio signal is being broadcast, it would be very difficult to stop someone from receiving it. It is nonrivalrous, since one person listening to the signal does not prevent others from listening as well. Because of these features, it is practically impossible to charge listeners directly for listening to conventional radio broadcasts.

Radio has found a way to collect revenue by selling advertising, which is an indirect way of “charging” listeners by taking up some of their time. Ultimately, consumers who purchase the goods advertised are also paying for the radio service, since the cost of advertising is built into the product cost. In a more recent development, satellite radio companies, such as SirusXM, charge a regular subscription fee for streaming music without commercials. In this case, however, the product is excludable—only those who pay for the subscription will receive the broadcast.

Some public goods will also have a mixture of public provision at no charge along with fees for some purposes, like a public city park that is free to use, but the government charges a fee for parking your car, for reserving certain picnic grounds, and for food sold at a refreshment stand.

Read this article to find out what economists say the government should pay for.

In other cases, social pressures and personal appeals can be used, rather than the force of law, to reduce the number of free riders and to collect resources for the public good. For example, neighbors sometimes form an association to carry out beautification projects or to patrol their area after dark to discourage crime. In low-income countries, where social pressure strongly encourages all farmers to participate, farmers in a region may come together to work on a large irrigation project that will benefit all. Many fundraising efforts, including raising money for local charities and for the endowments of colleges and universities, also can be viewed as an attempt to use social pressure to discourage free riding and to generate the outcome that will produce a public benefit.

Common resources and the “tragedy of the commons”

There are some goods that do not fall neatly into the categories of private good or public good. While it is easy to classify a pizza as a private good and a city park as a public good, what about an item that is nonexcludable and rivalrous, such as the queen conch?

Questions & Answers

Pls where can I found PRICE CONTROL on this app
Samuel Reply
top left corner
A situation in an economy with one producer but many consumers
Kabali Reply
What is the theory of population according to Malthus?
What is the Malthusian population theory?
The Malthusian theory of population state that, where there are means of substinence like food, human beings have the tendency to procreate (ie.give birth) without restraint (ie. control).
he stated that population unchecked grows at a geometric progression ie 1,2,4,8,16 while the means food subsistence grows at arithmetic progression ie 1,2,3,4,5---- he declared that population has the tendency to outstrip the means of subsistence
What is money?
money is any commodity that act as a medium of exchange
money is medium of exchange which is use in taking goods and giving some of it's worth or money value
what is a debit card and a credit card?
a debit card is a payment card used instead of cash while purchasing
a credit card is a payment card issued to users to enable cardholder to pay a merchant for goods and services
oky tanx
What is an inferior good.?
what is monopoly
Richmond Reply
a market situation when there is only one seller of a product representing whole industry.
where one business is the dominant one in that market. It determines the market price as they are price makers. No entry, no competition.
it is a market situation where is a single seller and many buyer hear the seller is the price maker the is no free entering and exit in this market
A situation in the economy where there is one producer and many consumers
A market situation where there is one producer and many consumers.
Balance of payments for 2018
Mahlatse Reply
what is monopoly and what is monopolaist
Javid Reply
what is the affect of rise in value of dollar ?
monopoly"a single firm or company owns all or nearly all of the market for a given type of product or service "monopoly is a price maker ...barrier of entry ,non availability of close substitute.
monopolistic competition or market is a situation where there are few or many firm producing identical but differentiated product .eg difference in advertisement ,packing etc
monopolistic competition or market is a situation where there are few or many firm producing identical but differentiated product .eg difference in advertisement ,packing
monopoly is a market situation ...where there is a single seller and large number of buyers deals with commodities having no close substitutes......here the sellers are price makers... there is restrictions in the entry and exit of new firms in this market structure....
what is money?
money is a medium of exchange.....through which...commodities are bought and sold
money is a medium/means of exchange that generally accepted by law
What is tranfer earnings
what is savings income?
transfer earning is the minimum income that a factor is willing to accept in an occupation,it is also call the supply price of a factor
what is envelope curve
what is depreciation
depreciation means decrease in value of a assets due to normal wear or year ,means decrease in value of assets like a machine due to its daily use
Refers to wear and tear of capital machinery
what is meant by currency depreciation?
an envelope curve is also call an umbrella curve it is any curve that is enclosed by being tangen t to a series of other curves
fall in the value of currency vis-a-vis any other currency usually $ due to marker forces is called currency depreciation. it is different from devaluation where in value of currency is deliberately reduced to improve BoT
depreciation in its broad sense means loss in the value of fixed capital say a tractor due to i) normal wear and tear ii) normal rate of accidental damage iii) expected absolescence to meet this, Depereciation Reserve Fund is created it is calculated by firms on the basis of their experience.
what is green revolution ?discuss the achievement of green revolution in India
Sweety Reply
green revolution is the third revolution of agricultural refers to a set of research and development of technology transfer initiative occuring between 1930s and the late 1960s that increased agricultural is called green revolution
the green revolution happened because to improve the agricultural sector towards adopting mordern methods and improvement of agricultural equipments
what calculation for demand and supply
Amoo Reply
what is nationalisation
Awuni Reply
it is a process of converting private assets into public assets by undertaking the control of government or state authority
so true
what are some the things that may lead to nationalisation
Over exploring of customers by the private individuals Also to make the nationalised organisation social reliable and accessible by all
feeling of one's is called nationalisation. unity among them self .
anything which is widely acceptable as a medium of exchange
Shabana Reply
money ,currency
Hello plz,what is the full mean of tertiary?
al Reply
tertiary also called philoshper
tertiary means third..for example primary sector ,secondary and tertiary sector... means three number..
ru 9ice tnk
your most welcome.
what is money
what is a bank
a financial institution which holds money for its clients ,which collect deposit and lend money at interest and trades generally in money...
what is bankers draft ?kindly explain with example .
money "anything which is widely acceptable as a medium of exchange"
yes u ryt #shabana
difference between cost and price
Shallow definition
cost"the value of input that is the amount of money which is used to produce a good or service . price"an amount of money which has to b paid to buy something.
Tertiary is an adjective(pre position) for stages or levels and refers to "top, final, full term ." ; Advanced.
bank draft is a type of cheque which a person buy for to pay someone who is not willing to accept a personal cheque .
tertiary sector is an providing any kind of services.
primary sector is 'agriculture', secondary sector is ' industrial sector ,and the tertiary sector is ,' service sector' ,
subana are you understand now the meaning of bank draft?
what is golden- diamond paradox
what is occupational structure
Madhu Reply
occupational structure refers to the distribution of occupation on the basis of educational ,socoial ,income level in a society or economy
no that is not a exact meaning
than what is exact meaning
It refers to also the what is the average income of the person
what is deficit
Obiajunwa Reply
deficit = expenses > revenue
yeah expenses over revenue results in deficit
What is What is Equilibrium
Bright Reply
from business point of view it is that point where business revanu are equal to its expenses.
in economy where demand is equal to supply is called equalibrium
Equilibrium in economics is where quantity demanded is equal to quantity supplied
what are the objectives of devaluation
how the government solve the problem of scarcity
how government solve the problem of scarcity
by deciding the output limit for every industry and providing resources to these industries according to output limit .the problem can be solved
and by controlling the activity of production like as a mixed economy this problem can be solved
by proper planning to cater the needs of people, demand & supply process may prove helpful. and by imposing heavy import duty on the product to shift the demand towards available alternative sources.
changing the methods of production, and tax system
In problems of scarcity government should adopt a plan or state budget, form a long term policy , deal with corruption , mobilise resources ,systems and monitor.
by doing various plans or scheme and providing various kind of free or in less price to the needy people
Plx anyone explain bankers draft by giving example.
what is price elasticity of demand?
Asamoah Reply
price elasticity of demand is the percentage in quantity demanded of a good or service to the percentage change in its price.
Price elasticity of demand is a measure used in economics to show the responsiveness, or elasticity, of the quantity demanded of a good or service to a change in its price when nothing but the price changes.
Price elasticity of Demand is a prepotionat change in the demand due to change in price of the goods and service
what is monopoly and monopolistic?
Price elasticity of demand is the economy measure to show the responsiveness and change in price due to change in quantity.

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Source:  OpenStax, Principles of economics. OpenStax CNX. Sep 19, 2014 Download for free at http://legacy.cnx.org/content/col11613/1.11
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