Public goods, as distinct from private goods, are collectively consumed. Two important features of public goods are:

Non-rivalrous and non-excludable.

The correct answer is Option (3) → Non-rivalrous and non-excludable.

Public goods are goods that are collectively consumed and available to all members of society without reducing their availability to others.

They have two defining characteristics:

1. Non-rivalrous: One person’s use of the good does not reduce the amount available for others. Example: National defence, street lighting.

2. Non-excludable: It is not possible (or desirable) to exclude anyone from using the good, even if they do not pay for it. Example: Everyone benefits from clean air or a lighthouse’s beam.