ECONOMICS
MARKET FAILURES
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
It creates negative externalities
|
|
|
Consumption depends on the ability to pay
|
|
|
Its consumption by one consumer can have an effect on othe consumers
|
|
|
Its consumption by one consumer does not restrict consumption by other consumers
|
Detailed explanation-1: -Non-rivalry is what most strongly distinguishes public goods from private goods. A pure public good also has the characteristic of non-excludability, that is, an individual cannot be prevented from consuming the good whether or not the individual pays for it.
Detailed explanation-2: -Instead, public goods have two defining characteristics: they are nonexcludable and nonrivalrous. The first characteristic, that a public good is nonexcludable, means that it is costly or impossible to exclude someone from using the good.
Detailed explanation-3: -Private Goods are products that are excludable and rival. Public goods describe products that are non-excludable and non-rival. Common resources are defined as products or resources that are non-excludable but rival.
Detailed explanation-4: -Because the private market is profit-driven, it produces only those goods for which it can hope to earn a profit. That is, it will not produce public goods.