“private good”
Pick a “private good” that you consume/use. What is the good? For the good that you choose, answer the following questions:
1. What is a federal or state regulation/policy that affects either the production or consumption of the good? [you’ll need an outside citation/source for this]
2. What is the rationale for this policy/regulation? That is, what problem is the regulation trying to solve? [Look at the reasons for government intervention in the market on week 1 slides.].
3. Provide an alternative explanation for the regulation that focuses on politics rather than market failures. In particular, think about what interest groups might have advocated for the particular regulation.
Sample Solution
I choose a car as my private good. Cars provide individuals with the ability to transport themselves and others from one place to another, making them an important part of everyday life for many people. The production and consumption of cars is affected by several federal and state regulations/policies.
One example of this is vehicle emissions standards, which are regulated by the Environmental Protection Agency (EPA). According to the EPA website, “The Clean Air Act requires states to have motor vehicle emission control programs that meet federal requirements” (“Motor Vehicle Emission Regulations”). As a result, each state must develop policies regulating how vehicles must be designed in order to reduce air pollution caused by vehicles. These regulations help ensure that cars meet certain safety standards and produce fewer emissions than would otherwise be allowed.
Another policy affecting cars is insurance laws set by states. Each state has its own set of minimum liability coverage requirements that drivers must meet in order to legally operate their vehicles on public roads (“Car Insurance State Laws & Requirements”). This helps ensure that drivers are financially responsible if they cause any damage or injury while driving their vehicles. Other rules related to licensing, registration fees, speed limits, distracted driving laws also come into play when it comes to producing and consuming cars across different parts of the country.
Overall, there are numerous federal and state regulations/policies in place when it comes to cars – from emissions standards to insurance laws – all of which affect both the production and consumption of these goods in some way or another. By having these types of regulations in place, lawmakers can help ensure that everyone who drives a car does so safely and responsibly while reducing negative environmental impacts at the same time.
