Final answer:
The statement is true; national defense is a public good that is non-excludable and non-rival, meaning everyone benefits from it without necessarily paying for it, and its consumption by one person does not reduce its availability to others.
Step-by-step explanation:
The statement that the government has to produce goods like national defense because everyone can consume national defense without paying is true. This is because national defense is considered a public good. Public goods have two defining characteristics: they are nonexcludable and non-rival. Being nonexcludable means it is costly or impossible to exclude someone from using the good. Thus, everyone benefits from national defense regardless of whether they have paid for it or not, and its provision is not diminished by one person's consumption. This contrasts with private goods, which can be consumable by one individual at a time, and access can be restricted based on payment.
Furthermore, private companies find it challenging to provide public goods like national defense because there is no feasible way to charge individuals for their use. It is for this reason that the government, empowered by its ability to tax and draw upon the collective resources of its citizens, is typically the provider of national defense and other similar public services.