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Which of the following best describes how the demand curve for a public good is derived?
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8. The Types of Goods
Public Goods: Demand Curve and Optimal Quantity
Scelta multipla
Subsidized housing is an example of which type of good?
A
A private good
B
A club good
C
A public good
D
A common resource
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Step 1: Understand the definitions of the types of goods involved: Private goods are excludable and rivalrous, meaning people can be prevented from using them and one person's use reduces availability for others.
Step 2: Club goods are excludable but non-rivalrous, so people can be excluded but one person's use does not reduce availability for others.
Step 3: Public goods are non-excludable and non-rivalrous, meaning no one can be prevented from using them and one person's use does not reduce availability for others.
Step 4: Common resources are non-excludable but rivalrous, so people cannot be prevented from using them but one person's use reduces availability for others.
Step 5: Analyze subsidized housing in this context: it is excludable because only eligible individuals can access it, and rivalrous because housing units are limited and one person's use reduces availability for others. Therefore, subsidized housing fits the characteristics of a private good.
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