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Chapter 13: Problem 21

Provide two examples of goods/services that are classified as private goods/services even though they are provided by a federal government.

Short Answer

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Example 1: Postal Services - The USPS is a private good/service provided by the federal government. It is classified as such because it is both rivalrous and excludable, meaning the consumption by one individual reduces availability for others, and those who don't pay for it can be excluded from accessing it. Example 2: Federal Student Loans - These loans are private goods/services provided by the federal government as they are rivalrous and excludable. Availability for one student may impact another, and students who don't meet eligibility criteria or fail to repay will be excluded from accessing it in the future.

Step by step solution

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Example 1: Postal Services

The USPS (United States Postal Service) is an example of a private good/service provided by the federal government. USPS is responsible for providing postal services in the United States, delivering mail and packages to residents and businesses. It is classified as a private good/service because it is both rivalrous and excludable. This means that the consumption of postal services by one individual reduces the availability of the service for others, and individuals who don't pay for the service can be excluded from accessing it.
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Example 2: Federal Student Loans

Federal student loans are provided by the federal government to help students pay for their education expenses. These loans are considered private goods/services because they are also rivalrous and excludable. The availability of loans for one student may impact the amount available for another student, and students who don't meet the eligibility criteria or fail to repay their loans will be excluded from accessing the service in the future.

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Most popular questions from this chapter

Education provides both private benefits to those who receive it and broader social benefits for the economy as a whole. Think about the types of policies a government can follow to address the issue of positive spillovers in technology and then suggest a parallel set of policies that governments could follow for addressing positive externalities in education.

In what ways do company investments in research and development create positive externalities?

Name two public goods and explain why they are public goods.

Will the demand for borrowing and investing in R\&D be higher or lower if there are no external benefits?

Are the following goods non-rival in consumption? a. slice of pizza b. laptop computer c. public radio d. ice cream cone
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