ECONOMICS
MARKET FAILURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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it is possible to prevent someone from enjoying its benefits
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it is supplied by the government rather than through the free market
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one person’s use has no effect on the quantity available for someone else
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it is supplied at zero price
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Detailed explanation-1: -A good, service, or resource is excludable if it is possible to prevent a person from enjoying its benefits. A good, service, or resource is nonexcludable if it is impossible to prevent a person from enjoying its benefits. Examples of excludable items are: The services of Brinks security.
Detailed explanation-2: -A good is excludable if people (ordinarily, people who have not paid for it) can be prevented from using it. It is rival, or subtractable if one person’s consumption of a good necessarily diminishes another person’s consumption of it.
Detailed explanation-3: -Public goods are non-excludable-In the case of public goods, there is no possible way to exclude anyone from enjoying the benefits of the good. Due to this reason, public goods are called non-excludable.
Detailed explanation-4: -Excludable. The easiest characteristic of an excludable good is that the producer, supplier or managing body of the good, service or resource have been able to restrict consumption to only paying consumers, and excluded non-paying consumers.
Detailed explanation-5: -A good is excludable if a person can be prevented from using it. A good is rival in consumption if one person’s use of it diminishes others’ use. If good is not excludable, people have incentive to be free riders, because firms cannot prevent non-payers from consuming the good.