Which statement describes a feature of public goods?

• A. They are excludable and rivalrous.
• B. They are non-excludable and non-rivalrous.
• C. They are always produced by private firms.
• D. They cannot be provided by governments.

Answer: (B)

Public goods have two defining features: non-excludability and non-rivalry. Non-excludable means you can’t prevent people from benefiting even if they don’t pay. Non-rivalrous means one person’s use doesn’t reduce another’s ability to use it. Because of this, markets tend to underprovide them since people may free-ride. Governments commonly provide or fund public goods to ensure everyone can enjoy them. So describing a public good, you’d point to it being non-excludable and non-rivalrous. The other statements don’t fit: goods that are excludable and rivalrous are private goods typically provided by markets for paying customers; the idea that public goods are always produced by private firms or cannot be provided by governments contradicts the usual role governments play in supplying these goods.