Economics: The Basics 1st Edition by Mike Mandel

Exercise 8

Communities sometimes take on large amounts of debt to build a new baseball or football stadium. The expectation is that a professional sports team can help create new jobs, give an area more visibility, and attract new businesses.
a) Is this example of government action-taking on debt to pay for a sports stadium-an example of a public good, an externality, regulation, or redistribution?
b) Using the concepts in this chapter, explain why government funding of a new sports stadium might not produce the desired results.