Consider a park which is coming up in your residential area. Further assume that this park is non-rival and non-excludable. Your rich neighbour volunteers to bear all of the cost involved in the setting up of the park and its maintenance. A sign board felicitating his generous contribution is fixed by the residents at the entrance to the park.

(a) Identify and explain the theory of public finance which can be used to explain your rich neighbour's behaviour.

(b) Does this fully resolve the underprovision problem? (Yes/No) and Why?