A public good is characterized by being non-rival and non-excludable, which implies that

A public good is characterized by being non-rival and non-excludable, which implies that

• A. It is non-rivalrous and non-excludable
• B. It is rival and excludable
• C. It is rival but non-excludable
• D. It is excludable but non-rival

Answer: (A)

Public goods have two defining features: non-rivalry and non-excludability. Non-rival means one person’s use does not reduce another’s ability to use it; non-excludable means it’s not feasible to prevent people from using it, even if they don’t pay. Because you can’t easily charge users, private markets tend to underprovide these goods, leading governments to step in, often financed by taxes. A classic example is national defense, which protects everyone without excluding anyone and whose use by more people doesn’t reduce others’ protection. So, the statement that a public good is non-rivalrous and non-excludable best captures why such goods are typically provided by the government rather than by private markets.

Public goods have two defining features: non-rivalry and non-excludability. Non-rival means one person’s use does not reduce another’s ability to use it; non-excludable means it’s not feasible to prevent people from using it, even if they don’t pay. Because you can’t easily charge users, private markets tend to underprovide these goods, leading governments to step in, often financed by taxes. A classic example is national defense, which protects everyone without excluding anyone and whose use by more people doesn’t reduce others’ protection.

So, the statement that a public good is non-rivalrous and non-excludable best captures why such goods are typically provided by the government rather than by private markets.