Your government has decid

Your government has decid

Your government has decided to build a new recreational facility that will haveweight rooms, a swimming pool, a running track, etc. Your government claims thatthis exercise facility will encourage people to get more exercise and be healthier.The cost of this project is ONE HUNDRED MILLION dollars. The government willfinance this project by borrowing by issuing government bonds, and fromvoluntary, charitable contributions from the super-rich. Access and entry into thenew facility will be free-of-charge to ALL the people in the community.As construction continues on this rec. center, YOU have no intention of ever usingit. You certainly have not donated any money for the project; in fact you think thewhole thing is a waste of money. You prefer that the government spend moremoney subsidizing undergraduates by paying for their textbooks. However, you arenot unwilling to benefit from exercise, should it potentially make you healthier.1. What is it about this recreational center that ?might? qualify it as being a public good?2. What is meant by the ?free rider? issue and how ?might? this issue affect you personally withrespect to the exercise project?3. From a public good standpoint how would this rec. center differ from a government project tobuild a toll bridge across the San Francisco Bay?4. Now, your government decides to build a huge museum of modern art in your city. Onceagain, construction costs are covered by government borrowing. But once built, the museumcharges an admission of $12.00 for entry. Are there some aspects of this museum that makes it apublic good? Can you call the museum a merit good? What is a merit good?5. With the case of the modern art museum, the government hopes to ?pay? for the on-goingcosts of the project with admission fees. With the exercise facility, there is no obvious feecollected from the people who use it. In what ways do you think the government hopes that it (orthe community) will be compensated for this $100 million outlay for the new recreation hall? Forfull credit, give specific examples.

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