ECONOMICS
MARKET FAILURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Goods that are both excludable and rival in consumption.
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Goods that are neither excludable nor rival in consumption.
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Either A or B
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None of the above
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Detailed explanation-1: -Private goods are excludable and rival. Clothing is an example of a private good because some people are restricted from objects of clothing and an item of clothing can only be possessed or consumed by a single user at one time.
Detailed explanation-2: -Private Goods are products that are excludable and rival. They have to be purchased before they can be consumed. Thus, anyone who cannot afford private goods is excluded from their consumption. Likewise, the consumption of private goods by an individual prevents other individuals from consuming the same goods.
Detailed explanation-3: -Private goods are excludable. They are also rival, or subtractable. You can’t eat a hamburger that is being eaten by someone else. For example: Most goods that are commonly traded, from hamburgers to furniture to 747 airplanes.
Detailed explanation-4: -A public good has two key characteristics: it is nonexcludable and nonrivalrous. These characteristics make it difficult for market producers to sell the good to individual consumers. Nonexcludable means that it is costly or impossible for one user to exclude others from using a good.