The Major Distinction Between Private and Public Goods Is That

question 25

Multiple Choice

The major distinction between private and public goods is that

• A) private goods are goods produced by private firms whereas public goods are goods produced by government--the public sector.
• B) unlike private goods, public goods are nonexcludable--it is difficult or impossible to prevent nonpaying customers from receiving the good.
• C) unlike private goods, public goods are nonrival in consumption--the consumption of a unit by one person does not detract from the amount available to others.
• D) both b and c are correct.

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Definitions:

Acquired Assets

Assets obtained through purchase or merger by a company.

Double-Declining Balance

An accelerated method of depreciation that doubles the rate at which an asset's book value is reduced over time, reflecting quicker loss of value.

Straight-Line Depreciation

A technique for apportioning the price of a physical asset over its effective duration in steady annual portions.

Salvage Value

The expected salvage value of an asset after it has served its useful life.