Question

Private goods have two characteristics: they are excludable and rival in consumption. Pizza is an excludable good, because consumers cannot use it without paying the for it. Pizza is also a rival good, since only one person can eat the same piece of pizza." Which characteristics define private goods?

a) Non-excludable and non-rival
b) Excludable and non-rival
c) Excludable and rival
d) Non-excludable and rival

Answer 1

Private goods are defined by their excludability and rivalry in consumption.

Step-by-step explanation:

Private goods are defined by two characteristics: excludability and rivalry in consumption.

An excludable good is one that consumers cannot use without paying for it. For example, pizza is excludable because consumers must pay for it before they can eat it.

A rival good is one that can only be consumed by one person at a time. Pizza is also rivalrous because once one person eats a slice, it cannot be consumed by another person at the same time.

Therefore, the correct characteristics that define private goods are excludable and rival.