Public Goods

Watch the video by Dr. Mary J. McGlasson( https://www.youtube.com/watch?v=mYtW1Ug7L_s ) and answer the following questions.

1. What are the characteristics of private goods? 2. Who pays for private goods? 3. Consider excludability and rivalry. Which deals with the quantity of consumption and which deals with the quality of consumption? 4. Who pays for public goods? 5. Why are public goods considered nonexcludable? 6. Why are public goods considered non-rivalrous? 7. Are public goods generally over or underproduced in the market and why? Types of Goods 8. Use this table format that shows the four types of goods. Identify the name of each combination of characteristics (type of good). on-rival in consumption Rival in consumptio Excludable Non-excludable Now, classify these items by the categories you placed on the grid: a) A park in your city b) Ice Cream c) Irrigation water d) Flood control e) Movie Theaters f) Loaf of Bread 9) Fish in the river h) National Defense i) The books in your library at home j) The books in the public library 9. Your car insurance premiums are lower if you have had no moving violations for several years. Explain how this feature tends to decrease the potential inefciency caused by adverse selection. 10. A common feature of home construction contracts is that when it costs more to construct a building than was originally estimated, the contractor must absorb the additional cost. Explain how this feature reduces the problem of moral hazard but also forces the contractor to bear more risk than she would like. 11. True or false? Explain your answer, stating what concept analyzed in this module accounts for the feature. People with higher deductibles on their auto insurance a. generally drive more carefully. b. pay lower premiums