Principles of Microeconomics / Unit 12 MIC 1114 short lesson, about 20 seconds
Provision of Public Goods
Captions available
The idea
Governments provide public goods through taxes, which compel contribution, producing the good or buying it from firms. Markets provide some indirectly: broadcast radio is paid by advertising. Others mix charges and social pressure.
In practice
A park with paid parking; a volunteer patrol.
Where people slip
Taxes solve the free-rider problem, not the quantity question; how much defense to buy is left to politics.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Something wrong in this lesson? Flag it