Goods that are excludable include both:
A. public goods and common resources.
B. natural monopolies and public goods.
C. public and private goods.
D. rival and nonrival private goods.
The Correct Answer and Explanation is :
The correct answer is:
C. public and private goods.
Explanation:
The term “excludable” refers to a good or service where it is possible to prevent people who have not paid for it from using it. Goods that are excludable can be restricted or controlled by the owner or provider, ensuring that those who do not pay cannot access or consume them. Understanding excludability is a key concept in economics when classifying goods into four categories: public goods, private goods, common resources, and club goods.
- Public Goods: These are goods that are both non-excludable and non-rivalrous. This means that once a public good is provided, no one can be excluded from using it, and one person’s use of the good does not reduce its availability to others. For example, clean air or national defense are public goods. These are not excludable, so they cannot be restricted to paying customers.
- Private Goods: These are goods that are both excludable and rivalrous. For example, a sandwich or a car is a private good. If you own a sandwich, you can exclude others from eating it, and your consumption of the sandwich reduces the amount available for others. These goods are excludable because the provider can prevent others from using them if they don’t pay.
- Common Resources: These goods are non-excludable but rivalrous. For example, fish in the ocean or public pastures are common resources. While it is difficult to exclude someone from using these resources, the use by one person depletes the availability for others, making them rivalrous.
- Club Goods: These are excludable but non-rivalrous. Examples include subscription services like Netflix or a private club. The provider can exclude non-subscribers, but one person’s consumption does not limit the ability of others to consume the service.
In summary, excludable goods are typically private goods and some club goods, but not public goods or common resources.