--%>
Assignment Help - homework help

Free-rider problem

Explain the two characteristics of public goods? Describe the significance of each for public provision as opposed to private provision. Depict the free-rider problem as it associate to public goods?  Is the Canadian border patrol a public good or a private good?  Why?  How regarding satellite TV?  Describe.

E

Expert

Verified

Public goods are non-rival (one person’s consumption does not avoid consumption by another) and non-excludable (once the goods are generated nobody including free riders can be excluded through the goods’ benefits).  If goods are non-rival, there is less incentive for private firms to generate them – those purchasing the good could just let others the employ without compensation. Similarly, if goods are non-excludable, private firms are unlikely to produce them as the potential for profit is low. The free-rider problem occurs while people benefit from the public good without contributing to the cost (tax revenue proportionate to the benefit attained). The Canadian border patrol is a public good – my use and benefit does not prevent yours. Satellite TV is a private good – if the dish, receiver, and service go to my residence it can’t go to my neighbours. The fact that I could invite my neighbour over to watch does not alter its status from being a private good.

   Related Questions in Finance Basics

  • Q : Influence of opportunity costs How do

    How do opportunity costs influence the capital budgeting decision-making procedure? Opportunity costs reflect the foregone benefits of alternative not selected when a capital budgeting project is chosen. Any decrease in the cash flows of the fi

    		•
  • Q : Explain Continuously Vacant Positions

    Continuously Vacant Positions: On July 1, the positions which were continuously vacant for six successive monthly pay periods throughout the prior fiscal year are abolished by the State Controller's Office. The six successive monthly

    		•
  • Q : Explain Merit Salary Adjustment Merit

    Merit Salary Adjustment (MSA): The cost factor resultant from the periodic raise in salaries paid to the personnel occupying authorized positions. The personnel usually receive a salary raise of 5 percent per year up to the upper sala

    		•
  • Q : Define Fiscal Impact Analysis Fiscal

    Fiscal Impact Analysis: Usually refers to a section of an analysis (example, bill analysis) which recognizes the costs and revenue impact of a proposal and, to the level possible, a particular numeric estimate for appropriate fiscal years.

    		•
  • Q : Resolving ranking conflict Describe how

    Describe how to resolve a "ranking conflict" among the net present value and the internal rate of return. Why should the conflict be resolved as you described? Whenever there is a ranking conflict among net present value and internal rate of re

    		•
  • Q : Define the term Unencumbered Balance

    Define the term Unencumbered Balance: It is the balance of an appropriation not so far committed for particular purposes.

    		•
  • Q : Define Workload Workload : The

    Workload: The measurement of rises and reduces of inputs or demands for work, and an ordinary basis for projecting related budget requires for both established and new programs. This approach to BCPs is frequently viewed as an alternative to outcome o

    		•
  • Q : Explain Legislative Information System

    Legislative Information System (LIS): An on-line system formed and employed by the Department of Finance to maintain existing information regarding all bills introduced in the Assembly and Senate for the current 2-year session, and fo

    		•
  • Q : Finance powerpoint Hi, I am a

    Hi, I am a management student studying in a business school. I have given a case study (attached below in PDF) as evaluation. I was able to get an English version but since i am not familiar with the subject i don't know how to solve this. I would like to know if you can provide any solution f

    		•
  • Q : Effect of change on equilibrium

    Normal 0 false false