Wireless high speed internet is provided for free in the airport of the city of communityville.

a) At first, only a few people use the service. What type a good is this and why?
It’s a public good because it is neither excludable nor rival in consumption.

b) Eventually, as more find out about the service and start using it, the speed of a connection begins to fall. Now what type of a good is the wireless Internet service?
Common resource because it is rival in consumption but not excludable.

c) What problem might result and why? What is one possible way to correct this problem?
The internet will become so slow that no one will be able to use it. They can convert it to a club good and charge for access to the internet so there is not so many people on at one time.

are there any welfare or subsidy payments that should be reviewed or added?

To answer these questions, it is important to understand the concepts of public goods, common resources, and their characteristics.

a) At first, when only a few people use the free wireless high-speed internet service, it can be classified as a public good. A public good is defined as a good that is both non-excludable and non-rivalrous. Non-excludability means that it is not feasible to exclude anyone from enjoying the benefits of the good, and non-rivalrous means that one person's use of the good does not diminish its availability or use by others. In this case, the internet service is provided freely and without restriction to anyone in the airport, making it non-excludable. Additionally, the use of the internet by one person does not reduce its availability or quality for others, making it non-rivalrous.

b) As more people find out about the service and start using it, the speed of the connection begins to fall. Now, the wireless internet service can be considered a common resource. A common resource is defined as a good that is rivalrous but non-excludable. Rivalrous consumption means that one person's use of the good reduces its availability or quality for others. In this case, as more people use the internet simultaneously, the available bandwidth is shared among them, leading to a reduction in speed for each user. However, the service remains non-excludable as it is still freely accessible to everyone without any restrictions.

c) The problem that might result from the increasing usage of the wireless internet service is congestion and reduced speed. As more people use the service simultaneously, the available bandwidth gets divided, leading to slower connections for all users. This can cause frustration and inconvenience for users who rely on the internet for various purposes.

One possible way to address this problem is by converting the wireless internet service into a club good, meaning that access would be restricted and a fee could be charged. By charging for the service, the number of users could be limited, which would prevent overcrowding and help maintain faster connections for those who are willing to pay. This approach would not only generate revenue to support the maintenance and upgrading of the internet infrastructure but also help manage the demand and usage to improve the overall quality of the service.