1. Warm Up
Why do you think the federal government chose to provide this service (daily mail delivery) rather than letting a private company do it?

2. Thursday September 14, 2017
Objective:  Students will be able to compare the free enterprise system, socialism, and communism using the basic characteristics of economic systems.
Purpose: Knowing how an economic system operates will help each of you perform certain roles effectively and how they impact others.

3. Public Goods
Public Good: 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
To simplify the funding for public goods, the government collects taxes
Any number of consumers can use them without reducing the benefits to any single consumer
Free Rider: someone who would not be willing to pay for a certain good or service but who would get the benefits of it anyway if it were provided as a public good

4. This bridge is a public good
This bridge is a public good. It benefits society by encouraging commercial and personal links between two populated areas otherwise kept apart by a river.

5. Public goods are created after a cost-benefit analysis like this one
Public goods are created after a cost-benefit analysis like this one. Study the fictional event described here. Why was the Capp County bridge built as a public good rather than in the free market?

6. Market Failures
situations in which the free market, operating on its own, does not distribute resources efficiently
Example: Private roads
If private companies built and operated roads, they would be less likely to build roads in rural areas since they would be used less and thus generate no profit
They could also charge whatever they would like, since there would be no competition

7. In the 1930s, utilities had no incentive to string electric lines to isolated areas. Government took on that task with the Rural Electrification Administration.
Why do you think the government was willing to help bring electricity to rural areas?

8. Externalities
economic side effects of a good or service that generate benefits or costs to someone other than the person deciding how much to produce or consume
can be positive or negative
Government tries to prevent negative externalities
The private sector is generally better at generating positive externalities

9. Air pollution and water pollution created by factories such as these are negative externalities.

11. The government takes steps to limit negative externalities
The government takes steps to limit negative externalities. This costly pollution-control equipment is a response to government rules put forward by the Environmental Protection Agency.

12. This sign announces that shoppers can use an EBT card—food stamps—to pay for their purchases. Food stamps are an example of a government program that redistributes wealth.

13. The Problem of Poverty
While the free market has proven better than any other economic system at generating wealth, that wealth is spread unevenly throughout society
As a society, we recognize some responsibilities to the very young, the very old, the sick, the poor, and the disabled
These populations are assisted through the welfare system

14. Who do you think the person in this cartoon represents, and what is his reaction to the sign on the door?

15. What is the message of this cartoon
What is the message of this cartoon? What does it tell us about how Americans feel about public goods?