AP Economics
Homework for December 9, 2015
Begin Unit 5 – Market Failure and the Role of Government
Read pages 83 – 96 (stop at “Externalities”). (The first 6 pages are review of what you already
know)
Answer the following questions:
1. List the characteristics of a public good.
2. Explain the terms “rivalry” and “excludability” as they relate to public goods.
3. What are “free riders?”
4. Why must government provide public goods – why aren’t they provided by the market?
5. How are demand schedules derived for public goods?
6. What is the supply curve for a public good?
7. How is the optimal quantity of a public good determined?
8. Explain the method and purpose of cost-benefit analysis.
AP Economics
Homework for December 9, 2015
Begin Unit 5 – Market Failure and the Role of Government
Read pages 83 – 96 (stop at “Externalities”). (The first 6 pages are review of what you already
know)
Answer the following questions:
1. List the characteristics of a public good.
2. Explain the terms “rivalry” and “excludability” as they relate to public goods.
3. What are “free riders?”
4. Why must government provide public goods – why aren’t they provided by the market?
5. How are demand schedules derived for public goods?
6. What is the supply curve for a public good?
7. How is the optimal quantity of a public good determined?
8. Explain the method and purpose of cost-benefit analysis.