Which of the following are characteristics of public goods?

• A. Rivalry and excludability
• B. Rivalry and non-excludability
• C. Non-rivalry and non-excludability
• D. Non-rivalry and excludability

Answer: (C)

Verified step by step guidance

1. Understand the definitions of the key terms: Rivalry means that one person's consumption of a good reduces the amount available for others, while non-rivalry means one person's consumption does not reduce availability for others.
2. Excludability refers to whether people can be prevented from using a good if they do not pay for it. Excludable goods allow this prevention, non-excludable goods do not.
3. Recall that public goods are defined by two main characteristics: they are non-rivalrous and non-excludable. This means one person's use does not diminish availability to others, and no one can be effectively excluded from using the good.
4. Evaluate each option against these definitions: 'Rivalry and excludability' describes private goods; 'Rivalry and non-excludability' is less common but not public goods; 'Non-rivalry and excludability' describes club goods or toll goods; 'Non-rivalry and non-excludability' matches the definition of public goods.
5. Conclude that the correct characteristics of public goods are non-rivalry and non-excludability.