Which of the following statement/statements are true?
Statement 1: Public goods are collectively consumed.
Statement 2: There is a feasible way of excluding anyone from enjoying the benefits of public goods.
Answer & explanation
Correct answer: option 3
The correct answer is Option 3: Statement 1 is true and Statement 2 is false
Statement 1: Public goods are collectively consumed. True. Public goods (like street lighting, national defense) are consumed by everyone collectively — one person's use does not reduce another's use.
Statement 2: There is a feasible way of excluding anyone from enjoying the benefits of public goods. False. One key feature of public goods is non-excludability — you cannot exclude anyone from benefiting once the good is provided.