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1 vote
Because public goods are:

a. excludable, people have an incentive to be free riders.
b. not excludable, people have an incentive to be free riders.
c. not excludable, people do not have an incentive to be free riders.
d. excludable, people do not have an incentive to be free riders.

1 Answer

5 votes

Answer:

The correct answer is

not excludable, people have an incentive to be free riders. (b.)

Step-by-step explanation:

Excludability of a good or service is a property of the good or service that makes it impossible for a consumer who has not paid for it to have access to it, hence, a non-excludable good or service is one to which it is impossible to prevent access by people who have not paid for it.

Based on whether goods are excludable or non-excludable, goods can be divided into four categories; private goods, common-pool goods, club goods and public goods.

Public goods: public goods are also called collective goods or social goods. Example here are public parks, street lights, air, etc. In addition to being non-excludable, public goods are also non-rivalrious, meaning that the use of the good by one person does not limit the use by another, hence the free rider incentive applies.

For a better understanding, I suggest you look up the other types of goods I mentioned above.

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