Which of the following statements concerning a pure public good is false? Questi

Question

Which of the following statements concerning a pure public good is false?

Question 6 options:

It is impossible to exclude nontaxpayers from the receipt of the public good

All benefits associated with the production and use of a public good are received by the government

The availability of a public good to one person simultaneously makes it available to all members of society

The private sector does not have an economic incentive to produce a socially optimal amount of a public good

It is impossible to exclude nontaxpayers from the receipt of the public good

All benefits associated with the production and use of a public good are received by the government

The availability of a public good to one person simultaneously makes it available to all members of society

The private sector does not have an economic incentive to produce a socially optimal amount of a public good

Explanation / Answer

Pure public good is a good from whose consumption nobody can be excluded and whose consumption by one does not decrease quantity available for others to consume.

So, pure public good is non-excludable and non-rival in nature.

This non-excludability and non-rival in nature create economic disincentive for private sector to provide the oure public good in socially optimal quantity.

So, pure public goods is generally provided by the government for benefit of society.

However, it is incorrect to assert that all benefits associated with the production and use of a public good are received by the government.

Hence, the correct answer is the option (2). [All benefits associated with the production and use of a public good are received by the government].

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