Question

Radio stations, tornado sirens, lighthouses, and street lights are all public goods in that all are nonrivalrous and nonexclusionary. Therefore, why does the government provide tornado sirens, street lights, and lighthouses but not radio stations (other than PBS stations)?

a. Radio stations are rivalrous.
b. There's no demand for public radio stations.
c. Lighthouses have higher public demand.
d. Radio stations can be exclusionary.

Answer 1

The government provides tornado sirens, street lights, and lighthouses because these safety services may not be adequately supplied by the market, whereas radio stations are able to support themselves through advertising revenue and thus do not require government provision.

Step-by-step explanation:

The question revolves around why the government provides certain public goods such as tornado sirens, street lights, and lighthouses, but not radio stations, with the exception of outlets like PBS. The key distinction here is that while all these items are nonrivalrous and nonexclusionary, the market is capable of supporting radio stations through advertising revenue and other means, making government intervention unnecessary. This is because although radio broadcasts are nonexclusionary and nonrivalrous, meaning that one's use does not inhibit another's and it's nearly impossible to prevent anyone from accessing the signal, radio stations can sustain themselves economically through ads. On the other hand, it is harder to find a market-based approach for tornado sirens, street lights, and lighthouses, which provide critical safety functions that the market may not adequately supply due to the lack of profit incentives.