What Are the Two Distinguishing Characteristics of a Public Good

question 23

Multiple Choice

What are the two distinguishing characteristics of a public good?

• A) nonrivalry in consumption and nonexcludability
• B) indivisibility in production and excludability of nonpaying customers
• C) provision by government and funding through taxation
• D) mass production and comparative advantage

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Definitions:

Unit Contribution Margins

The difference between the selling price per unit and variable cost per unit, indicating the contribution of each unit sold to covering fixed costs.

Fixed Costs

Expenses that do not change with the level of production or sales activities within a certain range or period.

Weighted Average

A calculation that takes into account the varying weights of different items in a dataset, commonly used in inventory costing.

Unit Selling Price

The price that a customer pays for one unit of a product or service.