Which statement about public goods is accurate?

• A. It is excludable and rival
• B. It is rival but not excludable
• C. It is excludable but not rival
• D. It is not excludable and not rival

Answer: (D)

Public goods are defined by two features: they are not excludable and not rival. Not excludable means you can’t easily prevent people from using the good, so those who don’t pay can still benefit. Not rival means one person’s consumption doesn’t reduce another’s ability to consume. Because of these properties, markets tend to underprovide public goods, since individuals have an incentive to free-ride. That’s why the accurate statement is that a public good is not excludable and not rival. Classic examples include national defense or clean air. The other descriptions correspond to different types of goods: something that is excludable and rival is a private good; rival but not excludable describes a common resource; excludable but not rival describes a club good.