New Click here to Enroll for SIDBI MSME Expert Classes by Experts

    Register

    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’.

    Practice Next