Why is important for the goverment to provide us goods and services?

Question

This is a question for a second grade economics lesson...
Why is it important for the goverment to provide us goods (parks, roads, street signs) and services (police officers, EMTS, firefighters)?

Also... How do buyers and sellers depend on each other?

I have been trying to come up with an easy answer that my students can remember...

Answer 1

Blimey! You could set those questions at degree level if you wanted to. But to get to the point...

Your first question. These items you highlight are all public goods, ie. they are items that the free market, left to allocate resources in it's own way, would probably not produce, as other more profitable opportunities are available. For instance, if the government/local council etc. didn't demand road signs, who would even buy them, let alone erect them? If the governement didn't collect the taxes to pay a policeman's wage, how many people would offer wages to those able to enforce the law? The argument of importance then stems from the name itself. Public 'good'. In economics, the word good, (whilst used as a label for a product or service) is actually intended to identify something of benefit that improves welfare, as most things and services do. You can add lighthouses and aspects of the armed forces such as missile defence to your list and all are examples of such goods that society certainly benefits from (although I personally think missile defence systems are a terrible idea, it's concept alone can classify it as such).

Next question...well, if it's 2nd Graders I don't think you need to work too hard to get them thinking on why do buyers need sellers? Mainly, it's so they can eat that Mars bar, drive that Lambo, see Lindsay Lohan in that bikini etc. And hopefully they'll be treated respectfully along the way. Why do sellers need buyers is where the nuance is. Yes, "to make a profit on their goods" is an answer, but begs the question of why bother selling/taking risk? The flow of information that buyers feed to sellers through the marketplace is most important. The entrepreneur with 10 products for sale knows he probably won't be selling the same 10 in 6 months time. He needs the feedback, whether through verbal/one-on-one interaction or through his sales figures to run his business effectively.

Hope this helps...

Answer 2

It is like asking can we live without food.
Now consider a World without money. The all transactions will be just bartering. With bartering we can have only limited kind of good transacted like agricultural products and sea food. Now consider a person want to protect himself from the vagrancies of Nature like Sum, rain, snow etc; what will he do? Taken to the next level what happens if a war breaks out with an Aggresor? Hopefully the answer gives you idea why money is needed in the first place instead of everyone living with just agriculture and sea food. The agressors ingenuinity makes the defender invent as deft as the agressor. So it goes on, one has needs that has to be fulfilled and for that just goods transacted don't suffice, if man needs to use his mind he needs incentive and just food and dirnk sometimes don't suffice since he also has an old age to take care off during which time he cannot induldge in bartering or loose his ability to produce something from nature of genuine value to others. Labor has time limitations. You cannot labor during your old age. So goes on the need for something other tha just goods transacted for goods. Something that is a store house of value, medium or exchange and something that maintains purchasing power. So they create money with the backing of Gold and precious metals, later into currency and later into wealth of nations. Hopefully you can create something out of this to 2nd graders who has to stand the intricacies of economics while they should be playing with Packman or monopoly. Give each of them a Monopoly board and ask them to give a report on it's intricacies and I think you have done your job.

Answer 3

Are you sure that's not too deep for second grade? You'd have to teach what a government is, then why we should pay taxes for community services.

For the second one, Why not just play grocery store. Have them build the different parts from fridge boxes and then take roles as shop owners and shoppers, and even delivery drivers.
.

Answer 4

to maintain an orderly society

Answer 5

So politicians can stay in office..