1 / 5

3.3 notes

3.3 notes. The role of gov’t in the economy. Public Goods. Provided by gov’t , used by everyone Funded by taxes Examples – street lights, national defense 2 characteristics: 1. can’t exclude anyone and 2. one person’s use doesn’t reduce usefulness to someone else. Market Failure.

cleave
Download Presentation

3.3 notes

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 3.3 notes The role of gov’t in the economy

  2. Public Goods • Provided by gov’t, used by everyone • Funded by taxes • Examples – street lights, national defense • 2 characteristics: 1. can’t exclude anyone and 2. one person’s use doesn’t reduce usefulness to someone else

  3. Market Failure • Can happen when people benefit or are hurt by something they are not part of • They are called positive externalities or negative externalities • Example: free rider that watches fireworks (positive) or pollution in air, water (negative)

  4. Cont’d • We want to SPREAD positive externalities, sometimes through subsidies • Example: flu shots for free • We want to SLOW DOWN or STOP negative externalities • Example: taxing companies that pollute

  5. Gov’t also… • Provides safety nets for people that may to too old or sick • Examples: Medicare, Medicaid, Social Security, unemployment insurance • http://www.cnn.com/2014/02/06/politics/unemployment-insurance/index.html?hpt=po_c2

More Related