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Guided Reading and Review
Provide students with a copy of the “Tree Map” graphic organizer (see Section Preview). Encourage them to use it to organize their ideas for this chapter.
Ask students to identify some examples of public goods such as national parklands, public education, fire protection, the highway system, and military defense. Explain that these are provided by the government because they would be impractical for individual consumers to pay for. Many of these public goods have side benefits that benefit nonpayers. These are called positive externalities. Economists believe that the government’s provision of these types of resources is one way to correct market failures. The government acts somewhat like a parent when the market fails to distribute resources efficiently. For example, it would be difficult for individuals to pay for efficient roads.
