The Difference Between a Private Good and a Public Good

question 152

Multiple Choice

The difference between a private good and a public good is that

• A) private goods are government-sponsored goods while public goods are government-inhibited goods.
• B) externalities are always created in the production process but not in the production of public goods.
• C) private goods make us happy while public goods do not.
• D) the exclusion principle applies to a private good but not to a public good.

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Definitions:

Gratuitous Promises

Promises made without the expectation of receiving anything in return, often lacking legal enforceability due to the absence of consideration.

True Bargains

Deals that are genuinely advantageous, offering good value for the money paid.

Legal Consideration

Something of value, which can be a promise, service, or object, exchanged between parties as part of a contract.

Refrain From Alcohol

An advisory or mandate to abstain from consuming alcoholic beverages.