Chapter 3 Providing Public Goods and Providing a Safety Net Section 3:3 and 3:4

Public Good Public good is a shared good or service for which it would be inefficient or impractical to make consumers pay individually and to exclude those who did not pay – Examples: Public Education, Highways, Law Enforcement

Public Good You need to decide if what is created is good for the good of society or not. Does the cost out weigh the benefit? – In other words, is it worth it?????????

Public Goods

Positive Externality A Positive Externality exists when someone who does not make or consume a certain product benefits from the good or service A Positive Externality exists when someone who does not make or consume a certain product benefits from the good or service EXAMPLE: Subway on top of the hill in Mankato benefits from having this company close by for the workers to go and eat everyday or people who live in the area or people who are shopping EXAMPLE: Subway on top of the hill in Mankato benefits from having this company close by for the workers to go and eat everyday or people who live in the area or people who are shopping

Negative Externality Negative Externality A Negative Externality exists when someone who does not make or consume a certain product nonetheless bears part of the cost of its production. A Negative Externality exists when someone who does not make or consume a certain product nonetheless bears part of the cost of its production. EXAMPLE: A second gas station opening up right next to BP in St. Clair would be bad news to BP EXAMPLE: A second gas station opening up right next to BP in St. Clair would be bad news to BP

Section 4

Poverty Threshold Poverty Threshold is an income level below that which is needed to support families or households  In other words, it’s the magic number where the government says you are poor and need help (your living in poverty) BUT, what is poor? What could you survive on by yourself or if you had a family of 4?

The Poverty Guidelines 1 person$ 10,830 2 people$ 14,570 3 people$ 18,310 4 people$ 22,050 5 people$ 25,790 6 people$ 29,530

Welfare Welfare is a government program aid to help the poor It was created in the 1930s by President Franklin D. Roosevelt Since 1996, welfare has changed dramatically. Now, welfare has limits and the amount of time people may receive welfare payments. Each state sets their guidelines on welfare.

Social Security In 1935, Social Security was a program designed to help the elderly people in America. In 1935, Social Security was a program designed to help the elderly people in America. Today, Social Security pays people who retire, people unable to work because of a disability, and in some cases, to a widowed spouse, or orphaned children Today, Social Security pays people who retire, people unable to work because of a disability, and in some cases, to a widowed spouse, or orphaned children

Workers’ Compensation This is an insurance program mandated by state law. This is an insurance program mandated by state law. Employers pay workers’ compensation insurance to cover any future claims their employees might make. Employers pay workers’ compensation insurance to cover any future claims their employees might make. Why have this? It helps a business who if they have a worker get hurt on the job, the worker could have income come in as they recover. Why have this? It helps a business who if they have a worker get hurt on the job, the worker could have income come in as they recover. What happens if I file a false workers’ compensation? What happens if I file a false workers’ compensation? ANSWER: It’s a crime, you go to jail ANSWER: It’s a crime, you go to jail