Consider the following statements about Public Goods 1 It is non rival in nature 2 Free ndash rider ...........

Economic Affairs Public Sector Enterprises

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Consider the following statements about Public Goods

1.It is non-rival in nature.

2.Free –rider problem may arise in case of public Goods.

3.These goods are only produced by the government authority.

Choose the correct statement/s by using the codes given below

Only one statement is correct

Only two statements are correct

Only three statements are correct

All statements are correct

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Explanation:

1 and 2 only

It is non-rival in nature: This statement is correct. Public goods are non-rivalrous, meaning that one person's consumption of a good does not diminish the ability of another person to also consume that good.

Free-rider problem may arise in the case of public goods: This statement is correct. The free-rider problem occurs when individuals can benefit from a public good without contributing to its production. Since public goods are non-excludable, people can enjoy the benefits even if they don't pay for them.

These goods are only produced by the government authority: This statement is incorrect. While some public goods are provided by the government, not all public goods are exclusively produced by the government. Public goods can also be provided by private entities or through a combination of public and private efforts.

Therefore, the correct answer is "1 and 2 only."

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