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PART I

 

Directions: Please answer each of the following questions in a paragraph for each.  Explain your thoughts with theory and examples where applicable.

 

1.For each of the following, determine whether it is a private good, public good, common resource or a club good.

a.Congested toll roads

b.Knowledge

c.Fish in the ocean

d.National defense

e.Congested nontoll roads

f.Cable TV

g.The environment

h.Fire protection

i.Ice-cream cones

j.Uncongested toll roads

k.Clothing

l.Uncongested nontoll roads

 

2.The creation of knowledge is a public good.  Because knowledge is a public good, profit-seeking firms tend to free-ride on the knowledge created by others and, as a result, devote too few resources to the creation of knowledge.  How does the U.S. government correct for this apparent market failure?

 

3.Why do wild salmon populations face the threat of extinction while goldfish populations are in no such danger?

 

4.Identify the three most important expenditure programs of the federal government.  Explain how they differ from the three most important expenditure programs of state and local governments?  Explain why it makes sense for the federal government to purchase “national defense” rather than state governments.

 

5.Why are Pigovian taxes preferred to regulatory policies as methods to remedy negative externalities?

 

 

PART II: Midterm Project

 

Click HERE to watch this seven minute video from Paul Krugman, the author noted in Module 2.

 

The video is on income inequality and the middle class.  Within the context of the work you have done up until this module, determine whether or not you concur with his argument.  Write a four page APA format position paper, with proper citations and references, explaining your opinion.  Please utilize LIRN to help you get started with your search.  You may visit the Academic Resource Center for a guide on how to utilize LIRN successfully.  Next, elaborate in two additional pages on how you see the policies of the last presidency impacting the outcomes indicated.  Be sure to cite sources.

 

 

PART III: Reflection Essay

 

Write a one page paper on what you found most useful in this module.  What was the biggest take-away lesson you learned and how do you see firms applying the topic to decision making in a microeconomic methodology?

 

 

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