+ Public Goods & Government Safety Nets A PRESENTATION BY : D ERRICK A GUIRRE H OPE F OURNIER B ROOKE M AHONEY J USTIN O BERLE M ICHAELA S HAW B RITTANY W ATSON

+ Public Goods All governments provide public goods. A public good is a shared good or service in which it would be inefficient or impractical to: 1- Make consumers pay individually 2- Exclude those who did not pay for it by taxes

+ Examples Of Public Goods Cleaning Mount Rushmore - It’s financed by a public sector. - It’s unrealistic to have everyone pay a share upfront. Therefore, we have taxes. -It’s just not practical to have the private sector produce it (highway)

+ Costs and Benefits Costs and benefits are critical in determining whether or not the government produces a public good because it determines if the benefits outweighs the costs of creating the product. If so, government will produce the the public good

+ Free Riders A free rider is someone who is not willing to pay for a good or service but will receive the benefit of it anyway at no cost.

+ National Defense The National Guard is something that our country no doubt needs but, if given a choice, not many people would pay for it. Taxes are imposed to allow such things to exist and cut down on “free riders.”

+ Externalities Externalities are economic side effects of a good or a service that produces costs or benefits to someone other than the person deciding how much to produce or consume. Can be positive or negative……..

+ Positive Externalities An example of a positive externality would be the building of a new bridge for farmers to be able to transport good more easily. The positive externalities of this project could include: Travelers being able to use the bridge Training workers to build the bridge increases their job skills More traffic increases business for nearby restaurants and gas stations.

+ Negative Externalities There are tons of examples of negative externalities, with pollution being one of the biggest and worst. But let’s stick with the bridge. Even after the bridge is built and helping so many people, it also does some harm: Construction lowers quality of air in the area Local fishing industry suffers Competition from bridge puts ferry company out of business

+ Government Safety Net Government safety nets are there to help those that are very young, very old, the sick, and the disabled. These programs are made to raise the citizens standard of living, or their economic well being measured by their ability to purchase goods and services that they need and want. The money for these programs mostly comes from the taxes of students.