Understanding Public Goods and Congestion

Public Goods and Congestion

Public goods are goods that are non-excludable and non-rivalrous, meaning that individuals cannot be effectively excluded from use and consumption by others, and one person's use does not diminish the availability of the good for others. Examples of public goods include national defense, clean air, and public parks.

Examples of Public Goods

1. Discoveries made through medical research

2. Small nonprofit clinic for homeless people funded by a charitable organization

3. Large urban nonprofit hospital

4. National health insurance

All of the examples listed above, with one exception, are public goods which at times might possibly lose some of their public good properties due to congestion. Which example is an exception?

Question

Which example is an exception?

a. discoveries made through medical research

b. small nonprofit clinic for homeless people funded by a charitable organization

c. large urban nonprofit hospital

d. national health insurance

Answer:

b. small nonprofit clinic for homeless people funded by a charitable organization

Explanation:

Public goods include uncongested free ways. Small non-profit clinic for homeless may become congested, and when it is funded by charitable institutions, it may be linked to some authorities. Public goods are for everyone.

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