Question

Which of the following are characteristics of public goods? Choose one or more: A. Public goods generally have a small value to society. B. The quality of public goods does not diminish when multiple people consume them. C. There is usually no way to exclude people from consuming a public good, even if they refuse to pay for it. D. Individuals have an incentive not to pay for a public good, even if they receive benefits from the good.

Answer 1

Answer:

The correct answers are B and C.

-The quality of public goods does not diminish when multiple people consume them.

-There is usually no way to exclude people from consuming a public good, even if they refuse to pay for it.

Explanation:

In economics, a public good is a good that can be made available inexpensively to many consumers and at the same time it is very difficult to prevent other consumers from using or consuming this good.  

A public good is therefore defined by the two properties of non-exclusion and non-rivalry. If these criteria are met in full, then one speaks of pure public goods, otherwise of impure public goods. Public goods can cause market failures. To solve this problem, the state itself can provide the public good or create incentives for private companies to produce the good. Classic textbook examples for public goods are lighthouses or street lighting.