1. Providing Public Goods Ch 3.3

2. Public Good
A public good is a ______ good or service for which it would be __________ or impractical to make consumers pay individually and to _______ nonpayers.
Would you pay a bill for the launch of the space shuttle? Or the cleaning of Mount Rushmore?
shared
inefficient
exclude

3. Public Goods
The government collects ______ in order to fund projects in the public interest.
taxes

4. National Parks
If a park were _______ owned, the owner could charge admission. Yet some benefits would still be enjoyed by nonpayers. Any number of consumers can use public goods without _______ the benefits to any single consumer. And increasing the number of _________ does not increase the cost.
privately
reducing
consumers

5. Costs and Benefits When a good or service is ______
1. The benefit to each individual is ____ than the cost that each would have to pay if it were provided ________
2. the total _______ to society are _______ than the total cost
When the ______ does not provide the good, the ____________ must.
public
less
privately
benefits
greater
market
government

6. Public goods are financed by the public sector, the part of the economy involving the government.
The ______ sector is the part of the economy that involves __________ of individuals and businesses has __________ to produce public goods.
private
transactions
no incentive

7. Free-Rider Problem not benefits
Free rider is someone who would ____ choose to pay for a certain good or service, but would get the ________ of it anyway if it were provided as a public good.
Army helmets, fire protection, roads… Would you pay?
Free riders ________ what they do not pay for. This problem suggests that if the government stopped collecting _____ and relied on _________ contributions, many public services would have to be __________.
benefits
consume
taxes
voluntary
eliminated

8. IS airport security a public good?
Before September 11th _______ were responsible for airport security – in Europe the government is responsible…now airplanes are seen as________, thus the benefits go beyond the airline and the ___________ is involved
airlines
weapons
government

9. Market Failure
A situation in which the market does not ___________________________.
When externalities are present, we have a ____________, because the costs or benefits of a good or service are not assigned properly.
distribute resources efficiently
market failure

10. Externality
The __________ side effect of a good or service that generates _____________ to someone other than the person deciding how much to produce or consume
__________ may be positive or negative.
economic
benefits or costs
Externalities

11. Positive Externalities
Benefit of a good gained by someone who ______ purchase it
Ex. Buy a old beat up house & remodel and beautify the outside
Hire underprivileged teens and train them
Protection of endangered species
Give me 2 more examples
did not

12. Negative Externalities
Cost of producing a good or service is paid for by someone _____ than the producer adding ___________ costs
Ex. Exxon Valdez leaks millions of gallons of oil in the ocean
Your neighbor plays the accordion and holds Friday Polka parties…you hate polka
other
unintended

13. Government Goals Govt tries to _____ negative externalities
Antipollution devices in cars called catalytic converters & EPA to decrease acid rain
Govt encourages _______ externalities
EDUCATION
limit
positive

14. Ch 3.4 Providing a Safety Net

15. Poverty
Poverty threshold is when income level is ______ that which is needed to support families or households
The free market system generates wealth but the wealth is spread _______ throughout society.
below
unevenly

16. The Census Bureau's poverty thresholds for 2016
One person (unrelated individual) Under 65 years$12,486;  65 years and over $11, 511
Two people $16,072  
under 65 years ; 65 years
and over $14,507
Three people $18,774
Four people $24,775
Five people $29,854
Six people $34,337
Seven people $39,509
Eight people $44,188
Nine people or more $53,155

17. Welfare System
The government eases poverty by collecting ____ from individuals and __________ some of those funds in the form of welfare.
Welfare is a general term that refers to government ___ for the poor.
The nation’s welfare system began under President ___ after the great depression.
taxes
redistributing
aid
FDR

18. Redistribution Programs
Cash _______ are direct payment of money to the __________________________.
Temporary Assistance for Needy Families
Social Security
Unemployment insurance
Workers Comp
Transfers
poor disabled and retired people

19. In-Kind Benefits
Goods and services provided for ____ or at greatly reduced prices
Food Stamps
Subsidized housing
Legal aid
free

20. Medical Benefits
The U.S. provides health insurance for the _______ and the disabled and the poor.
Medicare covers Americans over the age of ___ and the disabled.
Medicaid covers poor people who are __________ or not covered by their employers insurance plans.
elderly 65
unemployed

21. Education
Education add to the nation’s ____________ and labor productivity.
human capital

22. Faith-Based Initiatives
George W. Bush announced an initiative to rely on ______________ support for people in need
He believes that religious organizations are among the ______________ groups delivering social services.
Thus, these organizations will be allowed to _______ for ____________.
non-governmental
most successful
compete
federal funds