Q. 22 Radio stations, tornado sirens, ... [FREE SOLUTION]

Chapter 13: Q. 22 (page 316)

Radio stations, tornado sirens, light houses, and street lights are all public goods in that all are nonrivalrous and nonexclusionary. Therefore why does the government provide tornado sirens, street lights and light houses but not radio stations (other than PBS stations)?

Short Answer

Expert verified

The government provides tornado sirens, street lights, and light houses because they are essential to the safety of citizens. No private firm would be incentivized to fund these things themselves because they provide no private benefit or internalized social benefit.

Radio stations are often funded privately because stations can receive a private benefit through advertising.

Step by step solution

Concept Introduction

The two major standards that distinguish a public true are that it must be non-rivalrous and non-excludable. Non-rivalrous method that the products do no longer dwindle in deliver as more people eat them; non-excludability way that the best is to be had to all citizens.

Explanation

It says that radio stations, twister sirens, lighthouses and avenue lighting fixtures are all public items in that all our non rivalrous and non exclusionary. but, radio stations on Lee match public items that definition in a technical way. So unlike the other matters that are cited there as public items, radio stations are a touch bit exclusive. he's in being is that radio stations have advertising on them, and the radio stations are paid for with the aid of that advertising. And in case you are listening to the radio, then you definately turn out to be listening to the ones classified ads as well. So at the same time as you aren't necessarily directly paying the radio station, you're paying them not directly, paying them in a roundabout way by way of sacrificing a number of it slow paying attention to the classified ads. after which a positive portion of the humans listening will become the usage of the goods and provider is which can be being advertised. So they may be paying the character making the advertisement, who then is in flip paying the radio station