What two defining economic characteristics distinguish a pure public good (zuiver collectief goed), such as national defense or street lighting?
Answer and explanation
Correct answer: D. Non-rivalry in consumption and non-excludability of potential users
- Step 1: A pure public good cannot exclude anyone from benefiting once provided (non-excludability), and one person's consumption does not diminish availability to others (non-rivalry). Step 2. Because individuals cannot be excluded, the free-rider problem prevents private markets from supplying them profitably. Answer: Non-rivalry in consumption and non-excludability of potential users. Why not the others: Rivalry and excludability define private goods (e.g., apples, cars); government ownership is an institutional response, not an economic definition.
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