Public goods, as distinct from private goods, are collectively consumed. Two important features of public goods are:
Answer & explanation
Correct answer: option 3
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:
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Non-rivalrous: One person’s use of the good does not reduce the amount available for others. Example: National defence, street lighting.
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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.