The city of Logan Square needs $40 million for a network of streetlights. There are 20,000 residents in the Logan Square neighborhood, meaning the cost for each resident is $2,000. Psychiatrist Denise Miller refuses to donate $2,000 towards the project. This is an example of the problems encountered with:
A) consumer goods.
B) capital goods.
C) rival goods.
D) public goods.
E) private goods.

Question

Quizplus · Accepted Answer

This is an example of a public good, as the streetlights would benefit the entire community and not just an individual. However, the problem of financing for public goods arises when individuals refuse to contribute their fair share, which is what is happening in this situation.

The City of Logan Square Needs $40 Million for a Network