Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
They are non-excludable and non-rivalrous
B
They are always provided by the government
C
They can be efficiently allocated through market mechanisms
D
They are only available to paying customers
Understanding the Answer
Let's break down why this is correct
Answer
A key characteristic of public goods is that they are non-excludable, meaning that once they are provided, no one can be prevented from using them. This leads to the free rider problem, where individuals can benefit from the good without having to pay for it, since they cannot be excluded from using it. For example, think about a clean park; anyone can enjoy it regardless of whether they helped pay for its maintenance. Because people might choose not to contribute, believing they can still enjoy the park without paying, it becomes difficult to raise enough funds to keep the park nice. This situation can lead to underfunding of public goods, making it hard to maintain or improve them over time.
Detailed Explanation
Public goods are non-excludable and non-rivalrous. Other options are incorrect because Some think public goods must be provided by the government; It's a common belief that markets can always allocate goods well.
Key Concepts
Public goods
Topic
Public Goods and Free Rider Problem
Difficulty
easy level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.