Government provision of public goods


Problem: Unlike private goods, pubic goods are goods that are nonrival in consumption and/or their benefits are nonexcludable. When a good is nonexcludable, individuals can obtain the benefits of the good without paying for it (free riders). So, it appears that the existence of public goods is an example of potential market failure. Write a short response, using the arguments for government provision of public goods, describing why the government should or should not be involved in the provision of (1) airport security and (2) medical care.

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Finance Basics: Government provision of public goods
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