What are Public Goods?

ECO 356 Spring 2021
Quiz 1 Name_____________________________________________
M. Cummings Class Time _______________________________________
February 11, 2021
Instructions:
Please save this document as a word file, with your name/class time in the following format:
YourNameEarlySectionQuiz1 OR YourNameLateSectionQuiz1.
Do NOT send or return via blackboard!
Please answer each question directly on this document.
Warmup questions:
Each is worth 10 points.
For a good or service to be considered a “public good”, it must be provided by the Federal, State or local government. Is this statement true or false? Why or why not?
The statement is true. Public goods are those products and services provided by the government to every member of society. They are financed by taxes to be free for all members. The cases of public good are law enforcement, state security, and laws and regulations. They are products or services that seem more basic to the citizens. The public good has two major characteristics. They have to be non-rivalrous and non-excludable. The non-rivalrous means that the products do not decrease in stock with the increase in consumption. The non-excludability implies that the good is made accessible to all the citizens. Countries have their ways of defining which goods and public goods or services, and it often reflected in the state budgets.
The Lindahl equilibrium provides us with an understanding of the potential efficiency of “benefit taxation”, and how we can measure the concept of willingness to pay when determining the appropriate level of public goods. Is this statement true or false? Support your answer with an example.
The statement is accurate about the Lindahl equilibrium theory. Lindahl equilibrium compares the level at which people are willing to pay for the public good and how it affects their decision. The theory applies to taxation and centers around the benefits of taxation. The statement shows how people are always ready to pay taxes for the number of public goods. The theory is important as it shows how productivity can be attained in an economy by equating individual appraisal for public good to the cost of the public good. For example, when the residents are willing to pay $1000 for the first square meter and none for the 250th square meter, the administration needs to construct a 200 square meter pool and tax the people as per the amount they are willing to pay.
Fiscal choices or the diversity of state and local governments are a not fundamental nor essential characteristic of our federal system because we see most states operating or making decisions in a consistent manner. Is this statement true or false? Why or why not?
Federalism is the formal legal association between levels of government. The American federal system structure was designed to defend the pre-existing sections of the government and act as a commanding mode of allocating or disseminating errands among the administration entities. Over the years, it has displayed alliance among and across units of the state while respecting the typical primacies and needs of the populations in various state and local jurisdictions. Federalism today reflects opportunities...