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Practice mode Public Goods

How is a private good classified?

Correct answer A. Both rival and excludable

Explanation

A private good, such as an ice cream, can be withheld from non-payers and is used up by the person who consumes it, so it is both excludable and rival.

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Question 02 Public Goods

Twenty neighbours on a street each value street repairs at €3,000, and the repair costs €40,000. Which statement is true?

Correct answer A. It is efficient for the government to tax each resident €2,000 and repair the road

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Question 04 Public Goods

When governments use cost-benefit analysis to decide whether to provide a public good, why is it hard to measure the benefits?

Correct answer A. Respondents to questionnaires have little incentive to tell the truth

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