CA Foundation · Business Economics · Public Finance
Which of the following is an example of a public good in the economic sense?
National defence is a public good because it is non-rival and non-excludable. Protecting one citizen does not reduce protection for others, and no one can be left out. School seats, cinema tickets and branded tea can be priced and withheld, so they are private goods.
- AA private school's classroom seat
- BNational defenceCorrect
- CA cinema ticket
- DA packet of branded tea
Explanation
A public good is non-rival and non-excludable: one person's consumption does not reduce what others can enjoy, and nobody can be kept from benefiting. National defence fits this. The other options can be priced and denied to non-payers, so they are private goods.
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