A product which is non-rival and non-excludable and hence needs to be financed by taxation is called

A product which is non-rival and non-excludable and hence needs to be financed by taxation is called

• A. Public Good
• B. Private Good
• C. Club Good
• D. Common Resource

Answer: (A)

Think about goods that everyone can use without reducing anyone else’s ability to use them, and that are hard to charge people for. Non-rival and non-excludable goods fit this description, so they’re usually provided and financed by the government through taxation. Markets would underprovide these because people would prefer to benefit without paying. A public good includes examples like national defense or street lighting, where one person’s use doesn’t limit another’s and you can’t easily exclude anyone. This distinguishes it from private goods (rival and excludable), club goods (non-rival but excludable), and common resources (non-excludable but rival). So the product described is a public good.

Think about goods that everyone can use without reducing anyone else’s ability to use them, and that are hard to charge people for. Non-rival and non-excludable goods fit this description, so they’re usually provided and financed by the government through taxation. Markets would underprovide these because people would prefer to benefit without paying. A public good includes examples like national defense or street lighting, where one person’s use doesn’t limit another’s and you can’t easily exclude anyone. This distinguishes it from private goods (rival and excludable), club goods (non-rival but excludable), and common resources (non-excludable but rival). So the product described is a public good.