Which of the following are two features of public goods?

(a) They are provided according to the demands of the market and they are excludable.

(b) They are finite and paid for by individuals.

(c) Their costs are borne collectively and no one can be excluded from their benefits.

(d) They waste taxpayers' money and provide goods no one wants.

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8 August, 03:19

Which of the following are two features of public goods?

(a) They are provided according to the demands of the market and they are excludable.

(b) They are finite and paid for by individuals.

(c) Their costs are borne collectively and no one can be excluded from their benefits.

(d) They waste taxpayers' money and provide goods no one wants.

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Answers (1)

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Thalia Weiss · Answer 1

The answer is C) Their costs are borne collectively and no one can be excluded from their benefits.

Explanation:

Public goods differ from classical market goods in several ways. First, you can not exclude a person from provision even if that individual doesn't pay for the good. For example, you can enjoy of public lightning in the streets even if you do not pay taxes. There is no practical way of excluding you from this service. In private good, if you do not pay you are excluded. If you cannot pay a car you can not enjoy its use. However the cost to be able to give public goods must be incurred by everyone. I cannot charge you for the amount of light in specific street or time. So everyone pays taxes, no particular individuals, and with that money the government provides public lighting, i not a waste of money.