Private goods exhibit two consumption characteristics: they are excludable and .

• A. subject to free-rider problem
• B. rival in consumption
• C. non-rival in consumption
• D. non-excludable

Answer: (B)

Verified step by step guidance

1. Understand the definitions of key terms: 'excludable' means that people can be prevented from using the good if they do not pay for it, while 'rival in consumption' means that one person's consumption of the good reduces the amount available for others.
2. Recall that private goods are characterized by both being excludable and rival in consumption, which distinguishes them from public goods and common resources.
3. Identify that the free-rider problem occurs with non-excludable goods, so it does not apply to private goods since they are excludable.
4. Recognize that non-rival in consumption applies to public goods, where one person's use does not reduce availability for others, which is not the case for private goods.
5. Conclude that the correct characteristic to complete the statement about private goods is 'rival in consumption' because private goods are both excludable and rival.