ECONOMICS (CBSE/UGC NET)

ECONOMICS

MARKET FAILURES

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
What are Public Goods?
A
Goods that are both excludable and rival in consumption.
B
Goods that are neither excludable nor rival in consumption.
C
Either A or B
D
None of the above
Explanation: 

Detailed explanation-1: -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-2: -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.

Detailed explanation-3: -When a good is both excludable and rival in consumption, it is called a private good. Wheat is an example of a private good.

Detailed explanation-4: -One example of non-rivalrous goods is a television show. When a show is aired on TV, and a group of twenty people watches it from their home, other groups of people watching the show get to watch exactly the same show, regardless of how many of them are actually watching it together. Another example would be air.

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