Question

    Consider the following items in the two tables and

    choose the Correct Option. Table A Table B I- National Defence Public Good II- National Highways Private Good III- Government Administration Private Good IV- Clothes Public Good V- Movies Private Good
    A Only I Correct Answer Incorrect Answer
    B II, III, IV Correct Answer Incorrect Answer
    C I & v Correct Answer Incorrect Answer
    D I, II, III Correct Answer Incorrect Answer
    E III & IV Correct Answer Incorrect Answer

    Solution

    The benefits of public goods are available to all and are not only restricted to one particular consumer. For example, if a person eats a chocolate or wears a shirt, these will not be available to others. It is said that this person’s consumption stands in rival relationship to the consumption of others. However, if we consider a public park or measures to reduce air pollution, the benefits will be available to all. One person’s consumption of a good does not reduce the amount available for consumption for others and so several people can enjoy the benefits, that is, the consumption of many people is not ‘rivalrous’.

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