1) Why does the federal government provide broadband Internet services and upgrades to the power grid, tunnels, bridges, roads, mass transit, ports, and airports?
The federal government provides these goods and services and upgrades because ______________.
Wrong! - What would be the outcome if these goods, services, and upgrades were produced by private firms? Why does the political equilibrium promote production by the federal government?
Well Done! - People want broadband Internet services and upgrades to the power grid, tunnels, bridges, roads, mass transit, ports, and airports because they have external benefits that spill over into society. So, voters support provision of these goods, services, and upgrades with their votes and campaign contributions. Politicians supply these goods, services, and upgrades because they serve their self-interest. Provision of these goods, services, and upgrades by government creates the political equilibrium.
