Identifying and Providing Types of Goods

You will explain why some goods should be provided by the government and others should be provided by businesses. Given a list, correctly identify types of goods based on excludability and rivalness. Support your answer.

Task 1: Consider the following list of goods. For each good, explain the following points.

-- Is the good rival?

-- Is the good excludable?

-- Identify the type of good (Private Good, Public Good, Common Resource, or Quasi Public Good)

-- Are there any externalities associated with this good?

-- Explain whether the private market should provide this good or the government should provide this good. Explain in terms of whether the characteristics of the good would make it difficult to be provided by the private market or the government.

List of Goods:

A. A cup of coffee at a coffee shop

B. City fire protection

C. Polar bears in the Arctic

D. Clean air

Subtitle: The Principal Agent Problem

Task 2: Review the discussion in the lesson regarding the financial crisis. Discuss each of the following

points. Use sources from the ITT Tech Virtual Library to add to your answer.

Define the principal agent problem.

GE273: Week 5 Good Provision and Agents

Do corporate managers always act in the best interest of shareholders? Explain.
Research and present one CEO (Chief Executive Officer) pay package. Does this CEO earn more money if the company performs well?
What penalty does the CEO receive if the company does not perform well? Does the pay package of the CEO you presented add to or reduce the principal agent problem? Explain.