ECONOMICS (CBSE/UGC NET)

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ECONOMICS

MARKET FAILURES

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
A person benefiting from the protection of the armed forces does not affect the ability of another person to benefit. What quality of the armed forces (as a service) is this a result of?
A
excludability
B
non-excludability
C
rivalry
D
non-rivalry
Explanation: 

Detailed explanation-1: -Violence became the way of life in north-eastern States of India. State administration became incapable to maintain its internal disturbance. Armed Forces (Assam and Manipur) Special Powers Ordinance was promulgated by the President on 22nd May of 1958.

Detailed explanation-2: -Nonexcludable means that it is costly or impossible for one user to exclude others from using a good. Nonrivalrous means that when one person uses a good, it does not prevent others from using it.

Detailed explanation-3: -Examples of public goods include law enforcement, national defense, and the rule of law. Public goods also refer to more basic goods, such as access to clean air and drinking water.

Detailed explanation-4: -To be classified as a public good, the product or service must remain non-excludable and non-rivalrous. The types of public goods include security, education, knowledge, infrastructure, environment and health.

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