Text A, Paragraph 1
In 2023, the government of Denmark increased its spending on public goods such as national parks and museums. These resources are intended to improve the welfare of the entire population, but private companies rarely find it profitable to provide them, despite their widespread use.
Define the term public goods indicated in bold (Text A, paragraph 1).
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Text E, Paragraph 3
The Irish government has made sure that essential services like public transport and street lighting are widely available. These are often funded through taxation, as private companies would likely avoid offering these services due to their lack of profitability.
Outline one role of the government in providing public goods, as found in (Text E, paragraph 3).
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Text D, Paragraph 1
In many cities, some residents benefit from public services like waste collection without contributing to the cost. This free rider problem becomes more pronounced as fewer people pay for the service, eventually leading to financial strain on the system.
Define the term free rider problem indicated in bold (Text D, paragraph 1).
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Text D, Paragraph 1:
In comparison to public goods like clean air, private goods such as cinema tickets are typically sold by companies to individual customers. When tickets are sold out, others are excluded from attending the show, illustrating the limited nature of these goods.
Outline the difference between public goods and private goods indicated in bold (Text D, paragraph 1).
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Text A, Paragraph 2
As more residents in Johannesburg bypassed paying for electricity, the city struggled with power outages and a lack of resources to maintain the grid. This growing free rider problem placed financial pressure on the electricity provider and led to a variety of problems.
State two consequences of the free rider problem as indicated in bold (Text A, paragraph 2).
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Text D, Paragraph 1:
In 2023, the Spanish government increased its defence budget, but this decision came with a notable opportunity cost. Resources that could have been spent on social housing were instead diverted to military spending, raising concerns about how best to allocate limited funds.
Outline the opportunity cost of providing public goods, as indicated in bold (Text D, paragraph 1).
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Text A, Paragraph 1:
Public goods, such as national defence, benefit all citizens, while merit goods like education provide individual benefits but also offer wider societal advantages. Governments often step in to ensure both are adequately provided, though the nature of their provision can differ.
Outline the difference between public goods and merit goods as indicated in bold (Text A, paragraph 1).
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