Question

Question3

public goods are things that:

A)can be enjoyed by more then one person without any reduction in the goods

B) people cannot be excluded from their consumption

C) are unlikely to be provided by individual rational actors

D) all of the above

Answer 1

Non-excludable means when people cannot be excluded from enjoying the goods and services.

Rival means when an additional individual uses the good, then for remaining people the availability decreases.

Public goods can be defined as those goods which are non-rival in consumption and non-excludable in nature.

The public good is non-rival and non-excludable in nature. The cost of providing public good is very high and there is free rider problem. This is the reason why a market system fails to produce an efficient level of public good.

Hence it can be said that public good are things that can be enjoyed by more than one person without any reduction in the goods, people cannot be excluded from their consumption due to non-excludable nature of public good. It is not profitable to provide public good by an individual rational actor.

It means all the given options are correct.

Hence option D is the correct answer.