--%>
Assignment Help - homework help

Free-rider problem

Explain the two characteristics of public goods? Describe the significance of each for public provision as opposed to private provision. Depict the free-rider problem as it associate to public goods?  Is the Canadian border patrol a public good or a private good?  Why?  How regarding satellite TV?  Describe.

E

Expert

Verified

Public goods are non-rival (one person’s consumption does not avoid consumption by another) and non-excludable (once the goods are generated nobody including free riders can be excluded through the goods’ benefits).  If goods are non-rival, there is less incentive for private firms to generate them – those purchasing the good could just let others the employ without compensation. Similarly, if goods are non-excludable, private firms are unlikely to produce them as the potential for profit is low. The free-rider problem occurs while people benefit from the public good without contributing to the cost (tax revenue proportionate to the benefit attained). The Canadian border patrol is a public good – my use and benefit does not prevent yours. Satellite TV is a private good – if the dish, receiver, and service go to my residence it can’t go to my neighbours. The fact that I could invite my neighbour over to watch does not alter its status from being a private good.

   Related Questions in Finance Basics

  • Q : What is Special Items of Expense

    Special Items of Expense: It is an expenditure category which covers nonrecurring big expenditures or special aim expenditures which usually need a separate appropriation (or else need separation for clarity).

    		•
  • Q : Midterm Exam for FIN 6000 Please

    Please complete the midterm exam independently.  Don't discuss it with other students in the class.  Please email me if you have any clarifying questions.  <

    		•
  • Q : Describe factors affecting minimum cash

    Describe the factors affecting the option of a minimum cash balance amount. The minimum cash balance amount is find out by how easy it is to increase funds when needed, how predictable the cash flows are, and how risk averse managers are.

    		•
  • Q : Define Non-add Non-add : Refers to the

    Non-add: Refers to the numerical value which is displayed in parentheses for informational purposes however is not comprised in computing totals, generally as the amounts are by now accounted for in the budget system or display.

    		•
  • Q : Define Grants Grants : It is generally

    Grants: It is generally used to explain amounts of money received by an organization for a particular purpose however with no obligation to repay (that is, in contrast to a loan, though the award might stipulate the repayment of funds under some situa

    		•
  • Q : Define Current Year Current Year (CY):

    Current Year (CY): It is a term utilized in budgeting and accounting to designate the operations of the current fiscal year in contrast to past or future periods.

    		•
  • Q : Recognizes and state the significance

    Normal 0 false false

  • Q : Explain Object of Expenditure Object of

    Object of Expenditure (Objects): It is a categorization of expenditures based on the kind of goods or services received. For illustration, the budget group of Personal Services comprises the objects of Salaries and Wages and Staff Benefits.

  • Q : Effect of change on equilibrium

    Normal 0 false false

  • Q : Explain financial markets Explain

    Explain financial markets? Why do they exist?In financial markets, financial securities are bought and sold. They exist chiefly to bring deficit economic units (those needing money) and surplus economic units (those have extra money) together.

    		•