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Microeconomics 13th Edition by Russell Sobel, David Macpherson, Richard Stroup, James Gwartney
النسخة 13الرقم المعياري الدولي: 978-0538452281Microeconomics 13th Edition by Russell Sobel, David Macpherson, Richard Stroup, James Gwartney
النسخة 13الرقم المعياري الدولي: 978-0538452281 تمرين 2
*"The government should provide such goods as health care, education, and highways because it can provide them for free." Is this statement true or false? Explain your answer.
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The statement is incorrect. Each good is scarce in relation to human wants and so the provisions of goods, like education, healthcare, and highways involve a cost.
Although these goods are socially important and are in the nature of merit goods, the economic principles do not require that these goods be provided for free. If the government decides to provide these goods for free, then it will have to levy a higher tax on the citizens to finance these goods for free. This in turn misallocates the resources on one hand, and on the other, affects the ability to work, save and invest with the economic outcome becoming inefficient.
Therefore, the government should not provide these goods for free.
Although these goods are socially important and are in the nature of merit goods, the economic principles do not require that these goods be provided for free. If the government decides to provide these goods for free, then it will have to levy a higher tax on the citizens to finance these goods for free. This in turn misallocates the resources on one hand, and on the other, affects the ability to work, save and invest with the economic outcome becoming inefficient.
Therefore, the government should not provide these goods for free.
Microeconomics 13th Edition by Russell Sobel, David Macpherson, Richard Stroup, James Gwartney
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