What would happen if the Government left road-building up to citizens or private companies? What problems might arise? (list 3)

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What would happen if the Government left
road-building up to citizens or private
companies? What problems might arise? (list 3)
Warm-up
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Providing Public GoodsCh 3.3
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Public Good

• A public good is a ______ good or service for
  which it would be __________ or impractical to
  make consumers pay individually and to _______
  nonpayers.
• Would you pay a bill for the launch of the space
  shuttle? Or the cleaning of Mount Rushmore?

shared
inefficient
exclude
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Public Goods

• The government collects ______ in order to fund
  projects in the public interest.

taxes
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National Parks

• If a park were _______ owned, the owner could
  charge admission. Yet some benefits would still
  be enjoyed by nonpayers. Any number of consumers
  can use public goods without _______ the benefits
  to any single consumer. And increasing the
  number of _________ does not increase the cost.

privately
reducing
consumers
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Costs and Benefits
public

• When a good or service is ______
• 1. The benefit to each individual is ____ than
  the cost that each would have to pay if it were
  provided ________
• 2. the total _______ to society are _______ than
  the total cost
• When the ______ does not provide the good, the
  ____________ must.

less
privately
benefits
greater
market
government
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• Public goods are financed by the public sector,
  the part of the economy involving the government.
  
• The ______ sector is the part of the economy that
  involves __________ of individuals and businesses
  has __________ to produce public goods.

private
transactions
no incentive
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Free-Rider Problem
not

• Free rider is someone who would ____ choose to
  pay for a certain good or service, but would get
  the ________ of it anyway if it were provided as
  a public good.
• Army helmets, fire protection, roads Would you
  pay?
• Free riders ________ what they do not pay for.
  This problem suggests that if the government
  stopped collecting _____ and relied on _________
  contributions, many public services would have to
  be __________.

benefits
consume
taxes
voluntary
eliminated
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• IS airport security a public good?
• Before September 11th _______ were responsible
  for airport security in Europe the government
  is responsiblenow airplanes are seen as________,
  thus the benefits go beyond the airline and the
  ___________ is involved

airlines
weapons
government
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Market Failure

• A situation in which the market does not
  ___________________________.
• When externalities are present, we have a
  ____________, because the costs or benefits of a
  good or service are not assigned properly.

distribute resources efficiently
market failure
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Externality

• The __________ side effect of a good or service
  that generates _____________ to someone other
  than the person deciding how much to produce or
  consume
• __________ may be positive or negative.

economic
benefits or costs
Externalities
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Positive Externalities

• Benefit of a good gained by someone who ______
  purchase it
• Ex. Buy a old beat up house remodel and
  beautify the outside
• Hire underprivileged teens and train them
• Protection of endangered species
• Give me 2 more examples

did not
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Negative Externalities

• Cost of producing a good or service is paid for
  by someone _____ than the producer adding
  ___________ costs
• Ex. Exxon Valdez leaks millions of gallons of
  oil in the ocean
• Your neighbor plays the accordion and holds
  Friday Polka partiesyou hate polka

other
unintended
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Government Goals

• Govt tries to _____ negative externalities
• Antipollution devices in cars called catalytic
  converters EPA to decrease acid rain
• Govt encourages _______ externalities
• EDUCATION

limit
positive
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Ch 3.4Providing a Safety Net
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Poverty

• Poverty threshold is when income level is ______
  that which is needed to support families or
  households
• The free market system generates wealth but the
  wealth is spread _______ throughout society.

below
unevenly
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The Census Bureau's poverty thresholds for 2006

• One person (unrelated individual)10,294  
• Under 65 years10,488 
•  65 years and over9,669
• Two people13,167  
• Householder under 65 years13,569  
• Householder 65 years and over12,201
• Three people16,079

• Four people20,614
• Five people24,382
• Six people27,560
• Seven people31,205
• Eight people34,774
• Nine people or more41,499

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Govt Role Questions

• What can the govt do to combat poverty?
• What should I do?
• Is govt regulation the best way to help the poor?
• Does welfare raise poor peoples standard of
  living?

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Welfare System

• The government eases poverty by collecting ____
  from individuals and __________ some of those
  funds in the form of welfare.
• Welfare is a general term that refers to
  government ___ for the poor.
• The nations welfare system began under President
  ___ after the great depression.

taxes
redistributing
aid
FDR
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Redistribution Programs

• Cash _______ are direct payment of money to the
  __________________________.
• Temporary Assistance for Needy Families
• Social Security
• Unemployment insurance
• Workers Comp

Transfers
poor disabled and retired people
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In-Kind Benefits

• Goods and services provided for ____ or at
  greatly reduced prices
• Food Stamps
• Subsidized housing
• Legal aid

free
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Medical Benefits

• The U.S. provides health insurance for the
  _______ and the disabled and the poor.
• Medicare covers Americans over the age of ___ and
  the disabled.
• Medicaid covers poor people who are __________ or
  not covered by their employers insurance plans.

elderly
65
unemployed
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Education

• Education add to the nations ____________ and
  labor productivity.

human capital
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Faith-Based Initiatives

• George W. Bush announced an initiative to rely on
  ______________ support for people in need
• He believes that religious organizations are
  among the ______________ groups delivering social
  services.
• Thus, these organizations will be allowed to
  _______ for ____________.

non-governmental
most successful
compete
federal funds
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• What do you think is Americas most important
  feature of the countrys infrastructure?

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Teens CASH

• Merchants who once saw trouble in teens
  congregating in front of their stores now see
  _________, as teens have emerged as an _______
  force behind everything from fashion to
  entertainment to hair care. Today's teens are so
  different. Kids start making buying decisions
  ______ than other generations. By the time they
  are teens they are incredibly ____________________
  _.

dollar signs
economic
earlier
sophisticated consumers
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Activity

• Draft a proposal for a public good that would
  benefit the students of CHHS
• Write a convincing proposal that includes
• Detailed description of the project
• A list of the benefits
• An analysis of the cost
• An explanation of why benefits exceed costs