ECONOMICS
MARKET FAILURES
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
public goods are of equal benefit to all consumers.
|
|
|
there is no opportunity cost in the provision of public goods.
|
|
|
people could consume the good without paying for it.
|
|
|
the government should not levy a tax for providing public goods.
|
Detailed explanation-1: -The first characteristic, that a public good is nonexcludable, means that it is costly or impossible to exclude someone from using the good. If Larry buys a private good like a piece of pizza, then he can exclude others, like Lorna, from eating that pizza.
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: -Free Rider Problem Free rider problems are common in every community. Such a situation happens when people want to use a particular good without paying for the good. Free riders want to enjoy the benefits of such goods while hoping that someone else will pay for them or help with their maintenance.
Detailed explanation-4: -Public goods are described as non-excludable and non-rivalrous. Therefore, if a specific good is both non-excludable and non-rivalrous, it is considered a public good. This means that all people benefit equally from it, and no one is denied access to it.
Detailed explanation-5: -The correct answer is (b)-National defense. Non-excludability refers to a characteristic of a public good.