Problem 21 Provide two examples of goods/se... [FREE SOLUTION]

Chapter 13: Problem 21

Provide two examples of goods/services that are classified as private goods/services even though they are provided by a federal government.

Short Answer

Expert verified

Example 1: Postal Services - The USPS is a private good/service provided by the federal government. It is classified as such because it is both rivalrous and excludable, meaning the consumption by one individual reduces availability for others, and those who don't pay for it can be excluded from accessing it. Example 2: Federal Student Loans - These loans are private goods/services provided by the federal government as they are rivalrous and excludable. Availability for one student may impact another, and students who don't meet eligibility criteria or fail to repay will be excluded from accessing it in the future.

Step by step solution

Example 1: Postal Services

The USPS (United States Postal Service) is an example of a private good/service provided by the federal government. USPS is responsible for providing postal services in the United States, delivering mail and packages to residents and businesses. It is classified as a private good/service because it is both rivalrous and excludable. This means that the consumption of postal services by one individual reduces the availability of the service for others, and individuals who don't pay for the service can be excluded from accessing it.

Example 2: Federal Student Loans

Federal student loans are provided by the federal government to help students pay for their education expenses. These loans are considered private goods/services because they are also rivalrous and excludable. The availability of loans for one student may impact the amount available for another student, and students who don't meet the eligibility criteria or fail to repay their loans will be excluded from accessing the service in the future.