Question:
Which of the following is true about a public good?
(1) One person’s consumption means others get less.
(2) Consumers who do not pay for it can be excluded from its benefits.
(3) One more unit of a public good for some consumers means one less unit for other consumers.
(4) One person’s consumption does not exclude others from consuming it.
(5) Everyone pays the same price for the good.
Correct Answer:
(4)
Answer Explanation:
Public goods are characterized by non-excludability (you cannot stop non-payers from using it) and non-rivalry (one person’s use does not diminish another’s use). Option 4 accurately describes the non-excludability characteristic.
Topic: Public Goods Year: 2022
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