1. Assume that the marginal private costs of a firm producing fuel-efficient cars is greater than the marginal social costs. Assume that the marginal private benefits of a firm producing fuel-efficient cars is the same as the marginal social benefits. Discuss one way that the government can try to increase production and sales of fuel efficient cars to the socially desirable amount.Hint: the government is trying to affect production through costs, not benefits.
2. Can a company be guaranteed all of the social benefits of a new invention? Why or why not?
3. How do public television stations, like PBS, try to overcome the free rider problem?
4. Provide two examples of goods/services that are classified as private goods/services even though they are provided by a federal government.
5. Would you consider getting a free vaccination for the Coronavirus a Private Good or a Public Good? Explain. What are the positive externalities for free vaccination for the Coronavirus?