Which is the best example of a pure public good?

Which is the best example of a pure public good?

• A. A toll road
• B. A private club
• C. A private car
• D. National defense

Answer: (D)

The main idea being tested is the distinction between public goods and private goods, focusing on non-excludability and non-rivalry. A pure public good is non-excludable (you can’t practically prevent people from benefiting) and non-rivalrous (one person’s use doesn’t reduce another’s). National defense fits perfectly because everyone in the country benefits from protection, and one person being defended doesn’t lessen the protection available to others. You can’t exclude people from being protected, and one person’s protection doesn’t diminish another’s, so it’s non-excludable and non-rivalrous. Because of these features, markets would underprovide it, which is why governments typically supply it through taxation. The other options don’t meet both criteria: a toll road is excludable and often rivalrous due to congestion; a private club is excludable and typically rivalrous among members; a private car is both excludable and rivalrous in use.

The main idea being tested is the distinction between public goods and private goods, focusing on non-excludability and non-rivalry. A pure public good is non-excludable (you can’t practically prevent people from benefiting) and non-rivalrous (one person’s use doesn’t reduce another’s).

National defense fits perfectly because everyone in the country benefits from protection, and one person being defended doesn’t lessen the protection available to others. You can’t exclude people from being protected, and one person’s protection doesn’t diminish another’s, so it’s non-excludable and non-rivalrous. Because of these features, markets would underprovide it, which is why governments typically supply it through taxation.

The other options don’t meet both criteria: a toll road is excludable and often rivalrous due to congestion; a private club is excludable and typically rivalrous among members; a private car is both excludable and rivalrous in use.