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SEA at ASUStudent Economics AssociationStudent Economics Association
The Role of The Role of GovernmentGovernment
Economics and the Environment
ACTIVE ECONOMICS
Outsourcing
What is Economics?
Economics is a social science concerned withthe logic of scarcity, cost, value, and choice
Economics is not all about money, math, and numbers
Money is just a medium of exchange; it is not a productive resource.
Who should determine who gets the bottles of
water?
Phoenix…
…summer
What about Organs?
Sick…
…transplant
Government SpendingGovernment Spending
When governments spend money, they are making choices….. for you.
What choices do you want the Government to make for you?
Governments cannot repeal economic laws
Do you want the government deciding…..
Who gets a hot dog at a football game?
Who gets seats to a sold out concert?
Obviously not ….
Markets respond to individual choice
Do you want the government deciding…..
Which areas get protection from flooding?
Whether (and where) to
build new freeways?
Probably … these are matters
of collective choice
What is the difference between a pizza and a road?
Which one of these do you think can be more easily be provided by private industry?
Can access be restricted to a highway?
Can Pizza Hut restrict access to Pizza?
If I get on the freeway, does that prevent you from getting on the same freeway?
If I eat a pizza, does that prevent you from eating that same pizza?
Public Goods
Non-Rival: One person’s use does not prevent
another from using that same good
Non-Exludable: Everyone can use it, whether or not they pay
Lighthouse
Landmarks
Bike Paths
Fire Dept.
Police
Levees in New OrleansSuppose I visit New Orleans.
I am (theoretically) protected from flooding by their levee system.
Does this prevent others from receiving flood protection?
Can the levees be designed so tourists are not protected from floods?
New Orleans’ levees are an example of a public good.
Gov’t toGov’t tothe Rescuethe Rescue
The Free Rider Problem
A Free Rider bears less (or no) cost, but enjoys the same
benefits as other consumers, thereby …
Withholding useful information
Causing “demand” to be understated
Solution
ProfitProfitMotiveMotiveFailsFails
Do we need an ?What services does the Military provide?
Who should pay for and run the army? The Government? You? Me?
Do we value these services?
Would you voluntarily give money to fund the Military, if you knew that it would be funded by others?
What do you think the role of Government should be?
Should the government provide schools?
Should the government provide sport stadiums?
Should the government tell you what to wear?
Local Issues
Eminent Domain – 202 & Pecos Road
Would you contribute to a fund to widen the freeways in the Valley?
“Troon Unified School District?”
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