ECONOMICS
MARKET FAILURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It’s price is zero.
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It’s supplied by the government rather than the free-market.
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It is not possible to prevent non-paying customers from enjoying it.
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One person’s use affects the quantity available for others.
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Detailed explanation-1: -A good is nonexcludable if the supplier of the good cannot prevent those who don’t pay it from consuming or using it. A good is nonrival if one person’s consumption does not hinder anyone else’s consumption of the good.
Detailed explanation-2: -Non-Excludable Goods. Non-excludable goods are public goods that cannot exclude a certain individual or group of individuals from using them. For this reason, it is nearly impossible to restrict access to the consumption of non-excludable goods. A public road is an example of a non-excludable good.
Detailed explanation-3: -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-4: -Non-excludable goods and excludable goods are opposites. The former means every single person can access a certain public good and consume it, while the latter refers to goods that restrict some people from using them. Excludable goods are private goods, while non-excludable goods are public goods.
Detailed explanation-5: -The correct answer is option A) Police protection Non-excludable goods are a type of public goods whose access cannot be restricted and limited to certain individuals.