Multiple Choice
Which of the following is true about third parties in the context of the four types of goods and their characteristics?
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8. The Types of Goods
Four Types of Goods and Two Characteristics
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Which of the following is an example of a pure public good?
A
A slice of pizza
B
Cable television
C
National defense
D
A toll road
Verified step by step guidance1
Step 1: Understand the definition of a pure public good. A pure public good has two key characteristics: it is non-excludable (people cannot be prevented from using it) and non-rivalrous (one person's use does not reduce availability to others).
Step 2: Analyze each option against these characteristics. For example, a slice of pizza is rivalrous and excludable because if one person eats it, others cannot, and access can be restricted.
Step 3: Consider cable television. It is non-rivalrous to some extent but excludable because providers can restrict access to paying customers.
Step 4: Evaluate a toll road. It is rivalrous during congestion and excludable because tolls can prevent access to non-payers.
Step 5: Recognize that national defense is non-excludable and non-rivalrous, as it protects all citizens regardless of individual payment or usage, making it a classic example of a pure public good.
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