Which statement best characterizes non-excludable, non-rival goods, i.e., public goods?

Which statement best characterizes non-excludable, non-rival goods, i.e., public goods?

• A. They are excludable and rival in consumption
• B. They are rival and non-excludable
• C. They are non-excludable and non-rival
• D. They have no external costs

Answer: (C)

Public goods have two key traits: non-excludability and non-rivalry. Non-excludable means you can’t easily prevent people from using them, even if they don’t pay. Non-rival means one person’s use doesn’t reduce another’s ability to use it. So the best description is that these goods are non-excludable and non-rival. An example is street lighting: it benefits everyone nearby, and one person’s benefit doesn’t diminish another’s. The other statements mix up these features or bring in external costs, which aren’t defining features of public goods.

Public goods have two key traits: non-excludability and non-rivalry. Non-excludable means you can’t easily prevent people from using them, even if they don’t pay. Non-rival means one person’s use doesn’t reduce another’s ability to use it. So the best description is that these goods are non-excludable and non-rival. An example is street lighting: it benefits everyone nearby, and one person’s benefit doesn’t diminish another’s. The other statements mix up these features or bring in external costs, which aren’t defining features of public goods.