Why might the government provide a public good?

Why might the government provide a public good?

• A. To maximize government profit
• B. To exclude non-payers from usage
• C. It's inefficient to exclude non-payers
• D. To ensure privacy for consumers

Answer: (C)

The government provides public goods primarily because it is inefficient to exclude non-payers from their usage, which aligns with the defining characteristics of public goods. Public goods, such as national defense or public parks, are non-excludable and non-rivalrous. This means that once they are made available, it is difficult to keep individuals from using them, and one person's use of the good does not reduce availability to others. When a good is non-excludable, individuals may choose not to pay for it, hoping that others will cover the costs, leading to a situation known as the "free rider problem." In such cases, if the government does not step in to provide these goods, there may be underproduction or total lack of supply, resulting in societal inefficiencies. By providing public goods, the government helps ensure that these essential resources are available for all citizens, promoting equity and efficiency overall. The other options do not accurately reflect the rationale for government provision of public goods. Maximizing government profit does not align with the government's role, as public goods are not designed to generate profit. Excluding non-payers contradicts the essence of public goods, and ensuring privacy for consumers is usually related to services rather than public goods.

The government provides public goods primarily because it is inefficient to exclude non-payers from their usage, which aligns with the defining characteristics of public goods. Public goods, such as national defense or public parks, are non-excludable and non-rivalrous. This means that once they are made available, it is difficult to keep individuals from using them, and one person's use of the good does not reduce availability to others.

When a good is non-excludable, individuals may choose not to pay for it, hoping that others will cover the costs, leading to a situation known as the "free rider problem." In such cases, if the government does not step in to provide these goods, there may be underproduction or total lack of supply, resulting in societal inefficiencies. By providing public goods, the government helps ensure that these essential resources are available for all citizens, promoting equity and efficiency overall.

The other options do not accurately reflect the rationale for government provision of public goods. Maximizing government profit does not align with the government's role, as public goods are not designed to generate profit. Excluding non-payers contradicts the essence of public goods, and ensuring privacy for consumers is usually related to services rather than public goods.