What is the basic difference between a public good and a private good?
Please provide the best answer for the statement.
A private good is characterized by rivalry and excitability. Rivalry means that when one person obtains the product it is not available for purchase or consumption by another person. Excitability means that a person can not receive the benefits of the good if the person does not pay for it. Public goods are characterized by no rivalry and no excitability. Once a public good is provided to one person it is available for benefit by everyone. Also, people cannot be excluded from receiving the benefits of public good.
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If the economy is in equilibrium with real GDP less than potential GDP, there is ________ gap, and a fiscal policy that ________ is appropriate
A) a recessionary; decreases aggregate demand B) an inflationary; increases aggregate demand C) a recessionary; increases aggregate demand D) an inflationary; decreases aggregate demand E) a recessionary; increases potential GDP
Suppose the government imposed a binding price ceiling in the market for housing. Other things equal, the effect of this price ceiling will be to:
A. allow fewer low-income people to buy water. B. give an incentive for buyers and sellers to of houses to make illegal transactions. C. decrease the quantity of houses for sale in the market. D. all of the choices are correct.
Which of the following is true?
A. To fight a depression, Keynes said that the government should spend money on carefully chosen projects. B. According to Keynes, an equilibrium below full employment was a rare occurrence. C. Keynes suggested that savers save and investors invest for different reasons. D. Keynes believed the economy was basically stable.
When disposable income is 1250, saving is
A. -1000.
B. -500.
C. 0.
D. 500.