U. S. and Global Economics
In order to determine whether the goods and services provided are individual, public, or merit goods, consider the following scenarios and apply what you have learned. For each case, identify the type of good being described and explain your answer using the definitions of individual, public, and merit goods. Each case is worth 6 points.
- From your window, you can see a city block that’s on fire. You watch city firefighters rescue people and battle the flames to save the buildings. Public goods because a firefighter is paid by the government to give people safety and rescue from fires. The firefighters help everyone in the community.
- While visiting relatives, you learn that your cousins attend a nearby elementary school that is supported financially by local property tax revenue. Merit goods because it is supported by local taxes and it benefits everyone, individual and the whole society.
- You see a squadron of military jets flying overhead. Public goods because it is funded by taxes and it is spent on by the government to the defense of the entire nation
- You find out that your aunt works for a defense manufacturing company that has several defense contracts with the government. She tells you that she works for a team that is producing a communications satellite. Individual goods because it only benefits the individuals that are involved.
- Your class visits a local jail run by a private, profit-making company that detains county criminals and is paid with tax revenue. Individual goods because it only gets supported by the local taxes and only detains the county criminals and not any criminals.
