Which of the following chains correctly explains why the government must step in to provide goods like measures to reduce air pollution?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → No feasible way to exclude non-payers → free-riders appear → the link between producer and consumer through payment is broken → the government must provide the good
Clean air benefits everyone, and no one can be kept out. So people enjoy it without paying and become free-riders. No seller can collect fees, the payment link breaks, and the government must provide it.
The other chains break at one step. Consumers will not pay voluntarily for what they can get free, and with free-riders fees are hard to collect at all. A good where one person’s use reduces what others get is a rival private good, while public goods are non-rivalrous.
NCERT (2026-27): “Allocation Function of Government Budget … Two, in case of private goods anyone who does not pay for the goods can be excluded from enjoying its benefits. If you do not buy a ticket, you will not be allowed to watch a movie at a local cinema hall. However, in case of public goods, there is no feasible way of excluding anyone from enjoying the benefits of the good. That is why public goods are called non-excludable. Even if some users do not pay, it is difficult and sometimes impossible to collect fees for the public good. These non-paying users are known as ‘free-riders’. Consumers will not voluntarily pay for what they can get for free and for which there is no exclusive title to the property being enjoyed. The link between the producer and consumer which occurs through the payment process is broken and the government must step in to provide for such goods. …” |