ECONOMICS
MARKET FAILURES
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
A good provided by the government
|
|
|
A good purchased by individuals
|
|
|
A good that exists only in a free market
|
|
|
A good that produces no externalities
|
|
|
A good that are non-excludable and non-rivalrous
|
Detailed explanation-1: -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-2: -To be classified as a public good, the product or service must remain non-excludable and non-rivalrous. The types of public goods include security, education, knowledge, infrastructure, environment and health.
Detailed explanation-3: -The correct answer is (b)-National defense. Non-excludability refers to a characteristic of a public good.
Detailed explanation-4: -Answer and Explanation: The correct answer is b. A public highway. A non-excludable good can be defined in that one individual can’t prevent others from using it.
Detailed explanation-5: -Non-rivalry The television itself is a rival good, but television broadcasts are non-rival goods. Other examples of non-rival goods include a beautiful scenic view, national defense, clean air, street lights, and public safety. More generally, most intellectual property is non-rival.