Transcript What would happen if the Government left road

Warm-up
What would happen if the Government
left road-building up to citizens or
private companies? What problems
might arise? (list 3)
Providing Public Goods
Ch 3.3
Public Good

A public good is a ______
shared
good or service for which it
inefficient or
would be __________
impractical to make
consumers pay individually
and to _______
exclude nonpayers.

Would you pay a bill for the
launch of the space shuttle?
Or the cleaning of Mount
Rushmore?
Public Goods

The government collects ______
taxes in
order to fund projects in the public
interest.
National Parks

privately owned, the owner
If a park were _______
could charge admission. Yet some benefits
would still be enjoyed by nonpayers. Any
number of consumers can use public
reducing
goods without _______ the benefits
to any
single consumer. And increasing the
consumers
number of _________ does
not increase
the cost.
Costs and Benefits

public
When a good or service is ______
1. The benefit to each individual is ____
less than
the cost that each would have to pay if it were
privately
provided ________
greater
 2. the total benefits
_______ to society are _______
than the total cost

When the market
______ does not provide the good,
the ____________
government must.
Public goods are financed by the public
sector, the part of the economy involving
the government.
 The private
______ sector is the part of the
transactions of
economy that involves __________
individuals and businesses has
no incentive to produce public goods.
__________

Free-Rider Problem

Free rider is someone who would ____
not choose
to pay for a certain good or service, but would
get the ________
benefits of it anyway if it were
provided as a public good.

Army helmets, fire protection, roads… Would
you pay?
Free riders consume
________ what they do not
pay for. This problem suggests that if
the government stopped collecting
taxes and relied on _________
voluntary
_____
contributions, many public services
would have to be __________.
eliminated

IS airport security a public good?
September 11th airlines
_______ were responsible
for airport security – in Europe the government is
weapons
responsible…now airplanes are seen as________,
thus the benefits go beyond the airline and the
government is involved
___________
 Before
Market Failure


A situation in which the market does not
___________________________.
distribute resources efficiently
When externalities are present, we have a
____________,
market failure because the costs or benefits of
a good or service are not assigned properly.
Externality
economic side effect of a good or
The __________
benefits or costs to
service that generates _____________
someone other than the person deciding
how much to produce or consume
Externalities may be positive or negative.
 __________

Positive Externalities

Benefit of a good gained by someone
not purchase it
who did
______




Ex. Buy a old beat up house & remodel
and beautify the outside
Hire underprivileged teens and train them
Protection of endangered species
Give me 2 more examples
Negative Externalities

Cost of producing a good or service is
other than the
paid for by someone _____
unintended costs
producer adding ___________


Ex. Exxon Valdez leaks millions of gallons
of oil in the ocean
Your neighbor plays the accordion and
holds Friday Polka parties…you hate polka
Government Goals

Govt tries to _____
limit negative
externalities
Antipollution devices in cars called
catalytic converters & EPA to
decrease acid rain
positive
 Govt encourages _______

externalities

EDUCATION
Ch 3.4
Providing a Safety Net
Poverty
Poverty threshold is when income level is
below that which is needed to support
______
families or households
 The free market system generates wealth
but the wealth is spread unevenly
_______
throughout society.

The Census Bureau's poverty
thresholds for 2006







One person (unrelated
individual)$10,294
Under 65 years$10,488
65 years and over$9,669
Two people$13,167
Householder under 65
years$13,569
Householder 65 years
and over$12,201
Three people$16,079






Four people$20,614
Five people$24,382
Six people$27,560
Seven people$31,205
Eight people$34,774
Nine people or
more$41,499
Govt Role & Questions
What can the govt do to combat poverty?
 What should I do?
 Is govt regulation the best way to help the
poor?
 Does welfare raise poor people’s standard
of living?

Welfare System
The government eases poverty by
collecting taxes
____ from individuals and
__________ some of those funds in the
redistributing
form of welfare.
 Welfare is a general term that refers to
government ___
aid for the poor.
 The nation’s welfare system began under
President FDR
___ after the great depression.

Redistribution Programs

Cash Transfers
_______ are direct payment of
money to the
poor disabled and retired people
__________________________.
 Temporary
Assistance for Needy Families
 Social Security
 Unemployment insurance
 Workers Comp
In-Kind Benefits

Goods and services provided for ____
free or
at greatly reduced prices
Food Stamps
 Subsidized housing
 Legal aid

Medical Benefits



The U.S. provides health
elderly and
insurance for the _______
the disabled and the poor.
Medicare covers Americans
over the age of ___
65 and the
disabled.
Medicaid covers poor people
who are unemployed
__________ or not
covered by their employers
insurance plans.
Education

Education add to the
human capital
nation’s ____________
and labor productivity.
Faith-Based Initiatives

George W. Bush announced an initiative to
non-governmental
rely on ______________
support for
people in need
He believes that religious organizations are
among the most
______________
successful groups
delivering social services.
 Thus, these organizations will be allowed to
_______ for federal
____________.
compete
funds


What do you think is America’s most
important feature of the country’s
infrastructure?
Teens CASH

Merchants who once saw trouble in teens
congregating in front of their stores now
see dollar
_________,
signs as teens have emerged
as an economic
_______ force behind everything
from fashion to entertainment to hair care.
Today's teens are so different. Kids start
earlier than
making buying decisions ______
other generations. By the time they are
teens they are incredibly
_____________________.
sophisticated consumers
Activity


Draft a proposal for a public good that
would benefit the students of CHHS
Write a convincing proposal that includes:




Detailed description of the project
A list of the benefits
An analysis of the cost
An explanation of why benefits exceed costs