* The textbook exposits these ideas using a simple example – a fireworks display in Smalltown, U.S.A. The Study Guide offers another example, in which the cost of installing a streetlight in a neighborhood is less than the collective benefits of the people who live on that street – yet, no one takes the initiative to provide it. If you’re pressed for time, you can safely omit this exercise. Its contents will be covered in a subsequent slide, and students can learn this material from a careful reading of the chapter. This exercise has several objectives: 1) It gets students to anticip
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