Similarly, the humanitarian agencies have also a problem of supplying them with their basic needs. The government uses the borrowing internally and externally as a strategy to meet the free-rider problem whereas the humanitarian agencies depend on donations from well wishers (Project Vote Smart, 2015).
a) Private goods and public goods. Private goods can be described as goods that the citizens of a country can benefit from their consumption. In order for a customer to consume the good, they have to pay the owner of the goods through an agreement of sale. Besides, the supply of private goods is usually limited. In order to derive the demand curve for the entire market, all the curves of every customer have to be added.
b) On the other hand, public goods can be defined as products that are offered to the citizens of the country by their government free of charge. Usually, no competition exists given that the government acts as a monopoly. Examples may include voting, provision of relief foods, responding to national emergencies among other services and products provided by a government of its agencies.
The free rider problem arises as a result of oversubscription of customers seeking services and products that are offered by the government freely. An example of a free rider problem includes free medical services that are offered by public hospitals. When the government offers the services freely, many people will prefer to seek treatment from public hospitals so that they can reduce their medical expenses.
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“U.S. And Texas Government Essay Example | Topics and Well Written Essays - 250 Words”, n.d. https://studentshare.net/social-science/846183-us-and-texas-government.
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