"Public Goods" Please respond to the following:
· Identify a product that you have consumed in the past couple of months and explain what makes the product a public good, based on the characteristics of a public good as defined in this week’s textbook readings.
· Discuss two (2) reasons why the government only supplies public goods. Provide specific examples to support your response.
"Moral Hazard" Please respond to the following:
· In 2020, a leading insurance company started a policy that pays a policy holder a 5 percent rebate on their insurance premium in a year in which the policyholder does not file an insurance claim. For example, a household with an annual premium of $1,200 will get a $60 rebate check each year it does not file a claim. Identify what problem(s) the insurance company is trying to solve by introducing this policy.
· Determine whether the above policy benefits the insurance company or the policy holder. Provide support for your response.