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lectur6-page53 - “user fees” or a combination of the...

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53 53 Public Production vs. Public Provision u Public Provision: – Government uses subsidies, contracts with private firms, and administrative regulations and codes to enhance production of public and quasi-public goods and services to a point deemed optimum. – For Example: the government does not produce aircraft carriers or submarines, the government contracts with private firms to produce these. Quasi-public goods and services can be produced using public production or public provision. Since quasi-public goods can be excluded, government can choose to fund these goods and services outright with tax dollars or through
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Unformatted text preview: “user fees”, or a combination of the two. Using tax dollars and “user fees” allows for the recognition of spillover benefits and the market forces of supply and demand. Take the National Park system for example. If you were to go to Yellowstone National Park in north western Wyoming, you would be charged $20 per vehicle driven to enter the park in the year 2000. The charge to use the park is a “user fee” that helps offset the public cost (tax dollar cost) of providing and maintaining the park for citizens. Those that use the park the most, pay the most to use it....
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