Public Goods and Income Distribution

1. The good in my example is roads. Explain how the item is non-excludable. Would the item also be considered non-rival? Explain. Given your analysis of the item, would this item be considered a public good? Why or why not?
2. Identify the two basic principles of taxation. Which seeks to limit the "free rider" problem? How?
3. Looking at the data below, identify the type of tax (proportional, progressive, or regressive) for each scenario.

Scenario A Scenario B Scenario C Income Tax Paid Income Tax Paid Income Tax Paid $10,000 $800 $10,000 $1,000 $10,000 $1,000 $20,000 $2,400 $20,000 $1,600 $20,000 $2,000 $30,000 $5,400 $30,000 $1,800 $30,000 $3,000Quintile Market Income Before Tax Market Income After Tax Bottom 20 percent 5 8 Second 20 percent 8 13 Third 20 percent 19 22 Fourth 20 percent 22 23 Top 20 percent 46 34