11. Why might private markets tend to provide too few incentives for the development of new technology?

12. What can government do to encourage the development of new technology?

13. What are the two key characteristics of public goods?

14. Name two public goods and explain why they are public goods.

15. What is the free rider problem?

16. Explain why the federal government funds national defense.

Critical Thinking Questions

17. Can a company be guaranteed all of the social benefits of a new invention? Why or why not?

18. Is it inevitable that government must become involved in supporting investments in new technology?

19. How do public television stations, like PBS, try to overcome the free rider problem?

20. Why is a football game on ESPN a quasi-public good but a game on the NBC, CBS, or ABC is a public good?

21. Provide two examples of goods/services that are classified as private goods/services even though they are

provided by a federal government.
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