--%>
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 : Decision rule using net present value

    Describe the decision rule for accepting or rejecting proposed projects while using net present value? While using the net present value decision rule any project along with a net present value greater than or equal to zero would be acceptable.

    		•
  • Q : Value $100 is received at the beginning

    $100 is received at the beginning of year 1, $200 is received at the beginning of year 2, and $300 is received at the beginning of year 3. If these cash flows are deposited at 12 percent, their combined future value at the end of year 3 is

    		•
  • Q : What can a financial institution do for

    What can a financial institution frequently do for a surplus economic unit which it would have complexity doing for itself if the surplus economic unit (SEU) were to deal directly along with a deficit economic unit (DEU)?Usually, Surplus economi

    		•
  • Q : Compounded Quarterly In Financial

    1. If you deposit money today in an account that pays 4.3% annual interest, how long will it take to double your money? Round your answer to the nearest whole. years 2. Find the present value of the following ordinary annuities. Ro

    		•
  • Q : Chartered bank loan policy Normal 0

    Normal 0 false false

  • Q : Define the term Baseline Adjustment or

    Define the term Baseline Adjustment or  Baseline Budget: Baseline Adjustment: Also termed to as Workload Budget Adjustment.

    Q : How does depreciation influence cash

    Normal 0 false false

    		•
  • Q : Define the term Judgments Judgments :

    Judgments: It is generally refers to decisions made by courts against the state. The payment of judgments is subject to a range of controls and procedures.

    		•
  • Q : Explain Generally Accepted Accounting

    Generally Accepted Accounting Principles (GAAP): The accounting rules, principles, conventions, and procedures which are employed for accounting and financial reporting. The GAAP for governments are put by the Governmental Accounting Standards Board (

    		•
  • Q : Define Claim Schedule Claim Schedule :

    Claim Schedule: It is a request from a state department to the State Controller's Office to distribute payment from a legal appropriation or account for a legal state obligation. The claim agenda recognizes the appropriation or account to be charged,

    		•