Explanation:

Correct Option: (a) Explanation:  Statement 2 is incorrect: Public goods have positive externalities.  Statement 3 is incorrect: In some cases, markets can produce public goods. Supplementary notes: Public Good  A public good refers to a commodity or service that is made available to all members of a society. Typically, these services are administered by governments and paid for collectively through taxation.  Examples of public goods include law enforcement, national defense, and the rule of law. Public goods also refer to more basic goods, such as access to clean air and drinking water.  A public good has two key characteristics: it is nonexcludable and nonrivalrous. These characteristics make it diffi cult for market producers to sell the good to individual consumers.  Nonexcludable means that it is costly or impossible for one user to exclude others from using a good.  Nonrivalrous means that when one person uses a good, it does not prevent others from using it.  Positive externalities and public goods are closely related concepts. Public goods have positive externalities, like police protection or public health funding. Not all goods and services with positive externalities, however, are public goods. Investments in education have huge positive spillovers but can be provided by a private company.  Government spending and taxes are one way to provide public goods, but they’re not the only way. In some cases, markets can produce public goods .  For example, radio. It is nonexcludable since once the radio signal is broadcast,  it would be very diffi cult to stop someone from receiving it. It is also nonrivalrous since one person listening to the signal does not prevent others from listening as well. Because of these features, it is practically impossible to charge listeners directly for listening to conventional radio broadcasts.