Chapter 14

Government and Efficiency: Public Goods and Externality

This chapter reconsiders the possibility that government might have a role in promoting efficiency through intervention in markets, even if the economy is highly competitive.

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Overheads for This Chapter

Check your understanding -- multiple-choice questions

You Need to Know

To understand this chapter, you will need concepts from some of the preceding chapters:

• Chapter 1. Introduction
• Chapter 2. The Neoclassical Perspective
• Chapter 3. Supply and Demand
• Chapter 11. Efficient Allocation of Resources

Contents

1. Introduction
2. J. S. Mill's Lighthouse
3. Public Goods in General
4. Quasi-Public Goods
5. Efficiency and Reasonable Dialog
6. Externalities
7. Public Goods and Externality
8. Social Costs and Benefits
9. Social Optimum
10. A Fish Story
11. Commuters and Congestion
12. Policies
13. Political Viewpoints
14. Chapter Summary

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