What are public goods?

What are public goods?

• A. Goods that are only available to rich individuals
• B. Goods that are non-excludable and non-rivalrous
• C. Goods that can be sold for a profit
• D. Goods that are produced exclusively by the government

Answer: (B)

Public goods are characterized as non-excludable and non-rivalrous. Non-excludable means that it is not possible to prevent individuals from using the good, even if they do not pay for it. Non-rivalrous means that one person's use of the good does not diminish the availability of the good for others. A classic example of a public good is national defense; everyone benefits from it, and one person's security does not reduce security for anyone else. Understanding these characteristics is crucial because they differentiate public goods from private goods, which can be withheld from those who do not pay for them and whose use reduces availability to others. The other choices present characteristics that either incorrectly define public goods or depict goods in a way that doesn't align with the key economic concepts surrounding public goods.

Public goods are characterized as non-excludable and non-rivalrous. Non-excludable means that it is not possible to prevent individuals from using the good, even if they do not pay for it. Non-rivalrous means that one person's use of the good does not diminish the availability of the good for others. A classic example of a public good is national defense; everyone benefits from it, and one person's security does not reduce security for anyone else.

Understanding these characteristics is crucial because they differentiate public goods from private goods, which can be withheld from those who do not pay for them and whose use reduces availability to others. The other choices present characteristics that either incorrectly define public goods or depict goods in a way that doesn't align with the key economic concepts surrounding public goods.