
Relevance of excludable goods.

Answer to Problem 1CQQ
Option 'a' is the correct answer.
Explanation of Solution
Option (a):
Private goods have the characteristics of excludability and rivalry. Consumption of private goods reduces the availability for others and the producer can prevent the consumption if people do not pay for it.
Club goods are those goods that are non-rivalry and excludable n nature. The consumption of these goods does not reduce the availability for others. The producers of these goods can restrict the consumption if people do not pay for it. Thus, option ‘a’ is correct.
Option (b):
Common resources are resources that are available to all the people at free of charge. In other words, common resources are not owned by any private individual or by any public sector. Since common resource is available to all with free of price, it is not possible to exclude from the consumption. So, option 'b' is incorrect.
Option (c):
Public goods are the goods that have the characteristics of non-rivalry in nature and non-excludability. One person’s consumption should not reduce the availability for other person. It is not possible to restrict other people to avail the goods those who do not pay for it. So, option 'c' is incorrect.
Option (d):
Since it is not possible to restrict people who do not pay for public goods and common resources, option 'd' is incorrect.
Concept Introduction:
Excludable goods: Excludable goods are the commodity or service where people can be prevented from enjoying its advantages if they do not pay for it.
Want to see more full solutions like this?
- how commond economies relate to principle Of Economics ?arrow_forwardCritically analyse the five (5) characteristics of Ubuntu and provide examples of how they apply to the National Health Insurance (NHI) in South Africa.arrow_forwardCritically analyse the five (5) characteristics of Ubuntu and provide examples of how they apply to the National Health Insurance (NHI) in South Africa.arrow_forward
- Outline the nine (9) consumer rights as specified in the Consumer Rights Act in South Africa.arrow_forwardIn what ways could you show the attractiveness of Philippines in the form of videos/campaigns to foreign investors? Cite 10 examples.arrow_forwardExplain the following terms and provide an example for each term: • Corruption • Fraud • Briberyarrow_forward
- Principles of MicroeconomicsEconomicsISBN:9781305156050Author:N. Gregory MankiwPublisher:Cengage LearningMicroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage LearningMacroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506756Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
- Economics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage LearningEssentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage LearningMicroeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning





