ECO100 Week 5 Discussion 1 and Discussion 2

ECO100 Week 5 Discussion 1

"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.

 ECO100 Week 5 Discussion 2

"Moral Hazard" Please responds 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.