Which statement describes a feature of public goods?

Which statement describes a feature of public goods?

• A. They are excludable and rivalrous.
• B. They are non-excludable and non-rivalrous.
• C. They are always produced by private firms.
• D. They cannot be provided by governments.

Answer: (B)

Public goods have two defining features: non-excludability and non-rivalry. Non-excludable means you can’t prevent people from benefiting even if they don’t pay. Non-rivalrous means one person’s use doesn’t reduce another’s ability to use it. Because of this, markets tend to underprovide them since people may free-ride. Governments commonly provide or fund public goods to ensure everyone can enjoy them. So describing a public good, you’d point to it being non-excludable and non-rivalrous. The other statements don’t fit: goods that are excludable and rivalrous are private goods typically provided by markets for paying customers; the idea that public goods are always produced by private firms or cannot be provided by governments contradicts the usual role governments play in supplying these goods.

Public goods have two defining features: non-excludability and non-rivalry. Non-excludable means you can’t prevent people from benefiting even if they don’t pay. Non-rivalrous means one person’s use doesn’t reduce another’s ability to use it. Because of this, markets tend to underprovide them since people may free-ride. Governments commonly provide or fund public goods to ensure everyone can enjoy them. So describing a public good, you’d point to it being non-excludable and non-rivalrous. The other statements don’t fit: goods that are excludable and rivalrous are private goods typically provided by markets for paying customers; the idea that public goods are always produced by private firms or cannot be provided by governments contradicts the usual role governments play in supplying these goods.