1. What is the government’s role?

2. Protection Through regulation or government intervention in a market
Examples
-Producers must provide information
-Laws: Zoning laws, etc.
-Patents & copyright
-Federal & state agencies
FDA, OSHA, EPA, etc.

3. Downside of Regulation
Costly to implement requirements
Slows growth b/c cuts into profits
Limits competition
Increase in government spending
***Leads to deregulation or removal of some government controls

4. What is a Public Good?
A shared good/service for which it would be impractical to make consumers pay individually & to exclude nonpayers
Examples – roads and dams
Characteristics
-Collect taxes: simplifies funding
-Should be available to all: roads, parks
-Numerous users does not reduce benefit

5. How to be a public good?
Cost less than if provided by a private company
Total benefits to society greater than total cost

6. Market Failure
A situation in which the market does not distribute resources efficiently
Examples:
a. Free riders – Benefits from the good even
though didn’t pay for it
b. Private company building roads

7. Safety Net
Federal, state & local government programs to help raise people’s standard of living
Examples
-Social Security
-Unemployment insurance
-Workers’ compensation
-Medicare/Medicaid