Chapter 14R, Problem 13MCQ

To determine

The correct characteristics that apply to private goods and common resources

Answer to Problem 13MCQ

From the available options, the correct option is rival in consumption for private goods and for common resources, non-excludable.

Explanation of Solution

As private goods prevent people from consuming when one person consumes the same good which means these goods are excludable and rival in consumption. And, common resources are the resources that are common for all people, and no organization or individual can claim them such as water, etc. which means these resources are nonexcludable and rival in consumption as people can consume these resources excessively and consumption of one person diminishes the consumption of another person. Therefore, all options: a, b, c, and option d are incorrect.

Here, the correct option is e (private goods are rival in consumption and common resources are non-excludable).

Economics Concept Introduction

Introduction: Excludable refers to the situation when according to people's willingness to pay, producers can prevent certain people from using or consuming goods and services. And, a rival in consumption means if one person consumes a good or service, then it reduces the number of available goods and services for consumption by another.

A public good covers both non-excludable as well as non-rival.

And, a private good is excludable and rival in consumption which may prevent people from consuming when one person consumes the same good.