Question

Select the correct statements in the context of public goods.
(A) Collectively consumed.
(B) may be produced by government or private sector
(C) Non-rivalrous.
(D) Non-excludable.
Choose the correct answer from the options given below:

• A. (A), (B) and (D) only
• B. (A), (C) and (D) only
• C. (A), (B), (C) and (D)
• D. (B), (C) and (D) only

Hint:

Two pillars of public goods:
1. Non-rivalry (Zero marginal cost for an additional consumer).
2. Non-excludability (Gives rise to the free-rider problem).
Financing is public, but production can be private.

Answer 1

The Correct Option is C

Concept:
Public goods possess economic characteristics distinct from private goods, leading to market failure if left entirely to unassisted private markets.

Step 1: Evaluating the Characteristics of Public Goods:
- Non-rivalrous (C): One person's consumption of the good does not diminish the quantity available for others (e.g., national defense or street lighting).
- Non-excludable (D): It is impossible or prohibitively costly to exclude non-paying individuals from enjoying the benefits of the good.
- Collectively consumed (A): Because public goods are non-rivalrous and non-excludable, they are enjoyed collectively by the community.
- Production vs. Provision (B): Public goods are publicly provided (financed through taxes), but their actual physical production can be undertaken directly by the public sector or contracted out to private entities.

Step 2: Conclusion:
All four statements (A), (B), (C), and (D) accurately describe the properties and provision of public goods.
Final Answer:
Therefore, the correct choice is (C), representing (A), (B), (C) and (D).