Multiple Choice
Which of the following is an example of a natural monopoly?
41
views
8. The Types of Goods
Public Goods: Demand Curve and Optimal Quantity
Struggling with Microeconomics?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which two characteristics define a public good in microeconomics?
A
Non-rivalry and non-excludability
B
Non-rivalry and excludability
C
Rivalry and non-excludability
D
Rivalry and excludability
Verified step by step guidance1
Understand the concept of a public good in microeconomics: it is a good that is typically provided by the government or a collective because private markets may fail to supply it efficiently.
Define non-rivalry: a good is non-rivalrous if one person's consumption of the good does not reduce the amount available for others to consume.
Define non-excludability: a good is non-excludable if it is not possible to prevent people who do not pay for the good from consuming it.
Analyze the options given by comparing each characteristic to the definitions of non-rivalry and non-excludability.
Conclude that the two defining characteristics of a public good are non-rivalry and non-excludability, as these ensure the good can be consumed by many without reducing availability and without excluding non-payers.
3:52mWatch next
Master Demand Curve of a Private Good with a bite sized video explanation from Brian
Start learningRelated Videos
Related Practice
Public Goods: Demand Curve and Optimal Quantity practice set
Problem sets built by lead tutorsExpert video explanations