a study published in 1980, B. B. Gibson estimated the following price and income
ID: 1186008 • Letter: A
Question
a study published in 1980, B. B. Gibson estimated the following price and income elasticities of demand for six types of public goods:
State Activity Price Income
Elasticity Elasticity
Aid to needy people ?0.83 0.26
Pollution control ?0.99 0.77
Colleges and universities ?0.87 0.92
Elementary school aid ?1.16 1.14
Parks and recreational areas ?1.02 1.06
Highway construction and ?1.09 0.99
maintenance
(a) Do these public goods conform to the law of demand? For which public goods is demand price elastic? (b) What types of goods are these public goods? (c) If the price or cost of college and university education increased by 10 percent and, at the same time, incomes also increased by 10 percent, what would be the change in the demand for college and university education?
Explanation / Answer
Gas, fresh fruits and veggies, and cereal.
Public good:You may be referring to "the common good". It is called this to avoid confusion with the economics term "public good" meaning any good that is not owned by anyone (imagine a lakeside park). The common good is what the name suggests, it is the well-being of the average person. It was first used in American policy in the Preamble of The Constitution as "the general Welfare". It refers to the duty of the government to provide for the wellbeing of the people as a whole. Not necessarily of the MOST people, but of the people as a whole.
The most recent controversy about the common good arose during the eminent domain cases of the US Supreme Court during which the Court ruled that "the common good" can include more tax income for cities in a case in which a resident sued the city she was living in for taking her home under eminent domain to give to a private developer. The city's argument was that the increase in tax income as a result of the development constituted the "common good" in that it could be used to fund programs that would positively effect the populace of the city.
It is public good becuase children esspecially and adults can play and excerzise , or need the outdoors to relax.In addition, friends and family need these spaces for group sports or activities.
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