Externalities And Public Good/Non-Profit Roles

Preview 2 of 1 pages

See the first 2 pages exactly as they appear in the document.

Page 1
Read page 1 as text
Externalities and Public Good/Non Profit Roles Question 3 : Why does the government often need to step in for society to obtain an efficient level of public goods ? This is necessary for the government to often nedd to step in for society to provide public goods because otherwise without any governmental intervention the individuals would not be able to provide these goods. Individuals, or groups of individuals, could have an incentive according to the public goods that could be provide but the potential users of these good are not willing to pay for them and everyone wants to enjoy them , and not only some individuals or some groups of individuals (ex : public benches, public playgrounds…) In order to reach an efficient level of public goods the government can find funds by raising the taxes : by using this way everyone can financially contribute for these public goods. Prompt : “ Discuss nonprofits in the context of public goods and externalities. What is the economic justification for the existence of nonprofit firms? Compare the models of nonprofits presented in this chapter and consider the efficiency of nonprofits. We have just learned that perfectly competitive markets are efficient. Would this imply that nonprofit enterprises are inefficient? ”
Page 2