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?”