Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

Economics Policy Public Goods - Essay Example

Comments (0) Cite this document
This paper explores three related questions about price-excludable public goods, or merit goods. All the three questions are explained in detail and the second question is carefully explained through a diagram of marginal social and private benefit.
Education is a mixed good, which is non-rivalrous in nature, but can be excluded by setting a price…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER95.6% of users find it useful
Economics Policy Public Goods
Read TextPreview

Extract of sample "Economics Policy Public Goods"

Economic Policy: Public Goods Faizan Rahman This paper explores three related questions about price-excludable public goods, or merit goods. All the three questions are explained in detail and the second question is carefully explained through a diagram of marginal social and private benefit.
Question A: If a price-excludable public good, like education, is provided only by the private market, will there be an optimal amount that will be provided Why or why not
Education is a mixed good, which is non-rivalrous in nature, but can be excluded by setting a price. These types of goods can be provided by both the private and public sector. Consumption of education would not reduce the amount of education available to other users. However, it can be excludable because only those paying for it can get access to it. Education can also be called a merit good. If education is provided by the private market alone, it would result in imbalance, and hence, the market mechanism would not be able to match demand and supply. The reason for this is the fact that private forces are not concerned with the public interest; they are concerned about their own returns and nominal benefit. Therefore, the private market forces will only produce those goods which would lead to maximum profits. The private market forces ignore social costs and benefits, and therefore, will not produce the optimal quantity of merit or price-excludable public goods.
Question B: Will education be over produced or under produced Explain briefly.
Education would be under-produced by the private sector. All merit goods are considered good for the people, and the government desires to provide them in abundance. Merit goods have more social benefit than private benefit. Therefore, the private sector would not provide them optimally. Education has large external benefits relative to private benefits, that is, social benefits are greater than private benefits. Under the price mechanism, there would be few firms willing to provide education, and they would charge high prices. High prices would reduce consumption because some or many people might not be able to afford education. On the other hand, de-merit goods are those goods which are harmful for the people, and the government wants to limit their supply. Since these goods are in high demand, the private market would over produce them. De-merit goods have more social cost relative to private cost. In short, the private market would under produce merit goods and over produce de-merit goods (n.d.).
Question C: If a price excludable public good is not provided optimally, how can optimally be established
Since the private market does not provide appropriate quantities of merit and de-merit goods, government intervention becomes necessary. It is argued that if the individual is left to decide whether or not to pay for these goods, some would choose not to or may not be able to. There are several ways in which the government can control consumption of price-excludable public goods. Furthermore, the government can provide subsidies to private firms to supply these products at a lower price. Also, many people argue that the government can provide these goods for free to the general public by collecting money in the form of taxes.
1. (n.d.). Tutor2u-Market Failure: Merit Goods [WWW Page]. Read More
Cite this document
  • APA
  • MLA
(“Economics Policy Public Goods Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
Retrieved from
(Economics Policy Public Goods Essay Example | Topics and Well Written Essays - 500 Words)
“Economics Policy Public Goods Essay Example | Topics and Well Written Essays - 500 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Economics Policy Public Goods

Economics for Public Policy

...? Economics for Public Policy Economics for Public Policy Response to question Part a. Considering the application of the prisoner’s game in economics, during the advertisement, the advertisement effectiveness of Firm A is determined by Firm B’s advertisement. On the other hand, the profits obtained from Firm B would be affected by the Firm A’s advertisement. Whenever the two firms decide to advertise in a certain period, the advertisement will cancel out, the cost of advertisement will increase the expenses, and the number of customers would remain constant (Becker and Ann, 2009). In this case, the two firms would benefit from a reduction in the advertisement. In this regard, the legal system is the legal advertisement by the two...
8 Pages(2000 words)Essay

Canadian public economics policy

...Question In Canada, government spending is the highest contributor to gross domestic product (GDP). In 2000, it constituted 42.6 percent of GDP -an increase from only 18.7 percent in 1950, based on 1997 real terms. This measure, however, is not a reliable measure of the size of government because it cannot capture the full extent of government influence. GDP, defined as total domestic value of expenditures in domestically sold goods and services, accounts for household consumption, investments, government spending, and net exports. While this measures the total economic activity in a country, it cannot predict the behaviour of all economic actors, making it an imperfect indicator of the size of a government. Government spending has been...
3 Pages(750 words)Essay

Public and Private Goods

...Public and private goods affiliation Public and private goods In the market different commodities are characterized depending on the consumer base, demand and supply (Guess, 2003). One of the major categories of commodities is the public and private goods. The category is based on availability and ownership of the commodities. Public goodsPublic goods are commodities which do not have dictated ownership. The demand of public goods by one individual does not affect the supply of another individual. Public goods do not have ownership rights. A major characteristic of the goods is that they are non-rivalrous and non-excludable. In that, if the goods are used by one individual, the availability of the good is not depleted (Guess, 2003...
2 Pages(500 words)Essay

Health Economics: Public and Private Goods in Healthcare

Answer End of life or palliative care of elderly people with dementia needs to be addressed within the wider perspective of public good. Dementia refers to damage of brain cells that control memory and memory retention. People with dementia have progressive memory loss and tend to forget people, events, place or even their names and address etc. leading to serious concern for their own safety (Harris, 2006). They require constant help to attend their daily needs including personal hygiene, meeting medical needs etc. For elderly with dementia, palliative care becomes hugely critical issues because of myriad health associated problems and difficulties especially age related issues like general physical decline, chronic diseases, vis...
2 Pages(500 words)Essay

Public Goods

Public good in general takes the form that it can be consumed by every individual in a functioning society. Economics further defines the good to be non-rivalrous and non-excludable but impure public goods are characterized by partiality of the non-rivalrous and non-excludable properties as opposed to pure public goods that marry the fullness of the entire two properties.
An externality associated with impure public goods arises when the general utility of a certain good or production probability of an agent is linked on the non-monetary or non-pecuniary actions of another agent. It is a cost or benefit not catered for by the prices of related goods and the parties involved in the production or consumption of the good. This tr...
4 Pages(1000 words)Essay

Public goods

The democrats who urge the government to ensure that there is equality in education for the benefit of the future economy support this strategy (Kaul, 1999, p.23). The provision of education as a public good has resulted to the increment of taxes, since the government has to increase taxes to earn more revenue that finances the public schools.
The increment in taxes as the government tries to provide more resources in the education sector is criticized since the quality of education available is depreciating annually. The critics argue that education is a social good or a quasi-public good thus it is not the sole responsibility of the government to provide it (Kaul, 2003, p.17). This essay tries to identify the best way to off...
4 Pages(1000 words)Essay

Impure public goods

For example, people can pay to enter a showground to witness fireworks but the ones who failed to pay can still watch the fireworks being launched through their windows.
Alternatively, people pay for cable television services however some may decide not to pay but still watch the same programs from free to air channels (Bulte, Van Kooten and Timmothy, 2003). Non- rival condition applies in the context that an individual’s consumption of a product does not affect another person’s opportunity to utilize the same product. For instance, a person watching a football match on his/her television will not deny another person in a different setting who wants to watch the same game. The needs of both people can be satisfied simultaneous...
4 Pages(1000 words)Essay

Merit & Public Goods

...PUBLIC, MERIT AND PRIVATE GOODS Public goods, merit goods, and private goods Public goods are those good provided with no profit to the members of the society, the government, organization or even individuals are responsible for the provision of public goods. Merit goods are those goods which the government feels that the public will under consume and in many cases are provided ‘free at the point of consumption. merit goods are usually provided by both the public goods and the private sector. Private goods, on the other hand, are the goods owned by individuals, in that an individual can deny another individual from using the good (LeRoux, 2007). The services provided by the government to some extent are related to the public goods...
2 Pages(500 words)Essay

Micro and Macro Economics for Public Policy

...Micro and Macro Economics for Public Policy Micro and Macro Economics for Public Policy a) Assuming that each family build a brink and enjoy privately Utility rink size of the Olafsons is  This implies that each one of them enjoys a rink size of log(x) Utility rink size of the Perssons is  This implies that each one of them enjoys a rink size of log(x) Utility rink size of the Qoldsson is  This implies that each one of them enjoys a rink size of log(x) Marginal cost of brushing for each family will be    Marginal utility for each family will be    a) Maximization problem, Each family utility       The market allocation size of the brink depends on the utility of each...
3 Pages(750 words)Assignment

United States Foreign Policy from 1945-1991

American Presidents presiding over some key events in history, such as the Cuban Missile Crisis, The Cold War, The Vietnam War, etc., were hindered from acting as public representatives due to pressure from the military-industrial complex. John Kennedy, Lyndon Johnson, Ronald Reagan, George Herbert Walker Bush, and George W. Bush – all of them were subject to these opposing interests. But eventually, the corporate-government nexus proved too powerful; and in this sense, American Presidents after the Second World War were largely restricted and powerless to uphold their higher personal values. Most of the strategic moves on part of the United States after the end of the Great War were directly in response to an anticipated th...
11 Pages(2750 words)Essay

The Sale of Goods Act

The goods purchased in contracts should be of satisfactory quality as established by Section 14(2) of the Sale of Goods Act. However, this statutory requirement is applied to goods sold in the normal course of the business. In addition, goods supplied in contracts should have satisfactory quality and should be reasonably fit for the purpose for which the buyer had bought them.
Goods supplied must conform to their original description made at the time of entering into the contract. These requirements benefit the buyer and the supplier will be held liable if these requirements are breached. Essentially, the Sale of Goods Act ensures that the goods supplied must be of satisfactory quality and this requirement applies to the sale...
11 Pages(2750 words)Case Study

Public Relations and School Administration: The Jena Six Story

The infamous Juvenile Correctional Centre for Youth is located in Jena, with the institution closing after merely 2 years of its opening. The closing of the institution was owed to prevalent brutality and racism. One of the scandals they were involved in was the choking of black juveniles during a meeting with a lawyer. The guards also paid inmates for them to wrestle and fight with each other for their entertainment and also laughed at teenagers who are trying to commit suicide inside the jails (Witt, 2007).
At one time, district boundaries lines had been drawn to establish or maintain white-non white separation. It was in the last 20 or so years that nonwhites had begun to move into several areas; Jena for one, previously p...
11 Pages(2750 words)Term Paper

Managerial Economics and Business Environment

Once the above said subject matter is clearly sorted out, the next emphasis would be on the concepts like the opportunity costing, incremental principle, marginal principle, discounting principle, the principle of time perspective, and calculation of economic profit as the guidelines to the scope of managerial economics. (Surender. V, 2008).
To start with, we consider a firm for which different processes have to be carried to achieve its objectives of profit maximization (assuming that all the organizations work with the view to maximize profits). If firms from different sectors are identified simultaneously, then the working of the economy as a whole could also be analyzed which in turn is useful in the decision-making proce...
15 Pages(3750 words)Assignment

Company Strategy to the Public Sector

The definition of corporate strategies emphasizes the need for the organization to satisfy the needs of all the stakeholders if the organization is to achieve its overall objective of maximizing shareholder value. Stakeholders include employees, customers and the communities in which the organization operates. Employees, customers, and communities, therefore, have a significant impact on the success of the organization and thus on the corporate strategy of the organization. In formulating corporate strategy, organizations need to identify and priorities strategic issues, which involve scanning, selecting, interpreting and validating information. (Schneider, 1989).
The aim of this paper is to explain the strategy of an organiz...
7 Pages(1750 words)Assignment

The Evolution of Public Media

To instigate one to a category can now just as easily break out into a full-on discussion that may exhaust time and brain cells and yet still remain undefined.
In so much so that censorship and other restrictions, imposed by governments, critiques, audiences and other artists may condone a certain message of restraint that could bring about a new sense or in some cases lack thereof of artistic freedom. It is no longer a matter of identifying the genre and then moving along with the idea. Today’s global world will continue to embark and expand to involve all who are part of this world to be within the grasp of criticism or acclaim.
This categorizing and boxing up is now becoming obsolete as more and more works show...
9 Pages(2250 words)Coursework

Information Security Policy of Organization

In the modern age of information technology, there are many threats created for organizational information. Organizations need a security model that has the capability to handle and secure our information reserves. Technical administrative safety /security measures like security plans, actions and procedures are the general practices for the organizational information security procedures. The attentiveness of producing actions is concerned by the organizations to an appreciably smaller level, on the other hand at the same time these are weighed up as being further efficient organizational actions than technical administrative ones. Information security encompasses organizational features, officially authorized aspects, institution...
6 Pages(1500 words)Research Paper

European Union Policy: Turkey

...Running Head: European Union.... Topic: European union policy Order#: 377392 Topic: European union policy Profile of Turkey-history, geography and population: “Area: Approx 780,000 sq km (300,000 sq miles) Population: 71.9m (July 2008 est) Capital city: Ankara People: Majority Turks. Minorities recognised under the Turkish Constitution: Jews, Armenians and Greeks. Other ethnic peoples include Kurds, Circassians and Bosnians. Language: Turkish (official), Kurdish Religion: Muslim Currency: Turkish Lira (TL) Government: Parliamentary republic. Membership of international...
9 Pages(2250 words)Case Study

Increasing Public-sector Effectiveness by Changing Organisational Culture

Organizations have structures. Structures include degree or type such as horizontal differentiation, vertical differentiation, mechanism of coordination and control, formalization, and centralization of power. Classical theorists such as Taylor, Fayor, and Weber are of the belief that there is a single best way for organizations to be structured. However, organizations vary considerably on structural attributes. Modern theorists are of the belief that there is not one single best way to organize. An important aspect is a fit between the organization’s structure, size, technology and requirements of the environment. This is also known as the “contingency theory.” Size refers to the capacity, number of employees, o...
10 Pages(2500 words)Coursework

Juvenile Delinquency and Education: A Comparison of Public and Private Education

... can both the public and private education sectors arrive at mutual and complimentary measures to reduce juvenile delinquency. Review of the Literature The various case studies and researches which have been conducted over the years have attempted to pinpoint its causes. With high ranging statistics of the causal links between adult crime and juvenile delinquency, there is no wonder that there is much effort to gauge the reasons for it. The causes for such behaviour, similar to those of crime irrelevant of age, are found to be due to a number of encompassing social, psychological, and economic factors. Clinically speaking, the underlying roots are related to emotional maladjustments with strong links to dysfunctional family situations...
6 Pages(1500 words)Research Proposal

Economics of Public Policy

In particular, the paper will investigate the role of deregulation in the American economy, and especially in the financial services industry in the United States, in bringing the recession. Other factors such as self-regulation, privatization, and the role of private businesses will be seen as a means of identifying any challenges of all these as well as look at any available alternatives. It obtains information about how government policies can be used to improve service delivery and whether it is better for the government to stop involving itself in the delivery of goods and services. In doing this research, it will also be necessary to pinpoint the reasons why the involvement of the government in service and goods delivery...

14 Pages(3500 words)Term Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Economics Policy Public Goods for FREE!

Contact Us