Which feature is essential for a good to be classified as a public good?
Correct answer: A. It is non-rival and non-excludable
- A. It is non-rival and non-excludable
- B. It is privately owned and highly profitable
- C. It is rival and easily divisible
- D. It is produced only by foreign firms
Explanation
A public good can be consumed by one person without reducing its availability to others, and people cannot easily be excluded from using it. National defence is a standard example, whereas privately owned goods usually lack these features.
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About Public Finance
Government revenue and expenditure are analysed through taxation, public borrowing, budgets, subsidies, transfers and public debt. The topic explains how fiscal policy affects resource allocation, income distribution, economic stability and growth, while distinguishing direct from indirect taxes, progressive from regressive taxation, and public goods from goods supplied by private markets.
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