Chapter 13: Q.18 (page 316)
Is it inevitable that government must become involved in supporting investments in new technology?
No, it is not inevitable for government to involve in supporting investments in new technology.
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Provide two examples of goods/services that are classified as private goods/services even though they are provided by a federal government.
How do public television stations, like PBS, try to overcome the free rider problem?
Radio stations, tornado sirens, light houses, and street lights are all public goods in that all are non-rivalrous and non-exclusionary. Therefore why does the government provide tornado sirens, street lights and light houses but not radio stations (other than PBS stations)?
Can a company be guaranteed all of the social benefits of a new invention? Why or why not?
Assume that the marginal private costs of a firm producing fuel-efficient cars is greater than the marginal social costs. Assume that the marginal private benefits of a firm producing fuel-efficient cars is the same as the marginal social benefits. Discuss one way that the government can try to increase production and sales of fuel efficient cars to the socially desirable amount. Hint: the government is trying to affect production through costs, not benefits.
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