Answer to Question #132099 in Microeconomics for Tadiwa

Question

Discuss whether the government should directly provide good and services in the economy

Answer 1

Solution:

The government should directly provide public goods and services in the economy. This is because public goods and services are a necessity for the members of society, and all of them should benefit from the provision of public goods. Also, market failures can affect the provision of goods and services and bring about scarcity and hence the need for the government to provide them to ensure that they reach everyone in the economy. Another reason is that public goods and services are generally not adequately supplied by the private sector; the government should therefore supply them.