ECONOMICS
MARKET FAILURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The good is more harmful than consumers realise .
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There is no way to exclude people for consuming the good.
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If the good is provided for one person it must be provided for others.
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Consumption of the good by one person does not reduce the amount of the good available for others.
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Detailed explanation-1: -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. Also, the consumption of the goods by one person does not affect the supply available for consumption by another person.
Detailed explanation-2: -The two main criteria that distinguish a public good are that it must be non-rivalrous and non-excludable. Non-rivalrous means that the goods do not dwindle in supply as more people consume them; non-excludability means that the good is available to all citizens.
Detailed explanation-3: -Public Goods are non-excludable and non-rival, meaning that people can easily share these goods and there is no way to get someone to pay for consuming them.
Detailed explanation-4: -Most examples of non-rival goods are intangible. Broadcast television is an example of a non-rival good; when a consumer turns on a TV set, this does not prevent the TV in another consumer’s house from working. The television itself is a rival good, but television broadcasts are non-rival goods.
Detailed explanation-5: -Clean air; pollution abatement: The quality of the air we breathe in a particular neighborhood is both non-excludable and non-rivalrous. Pollution abatement is therefore a public good.