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:

Machine Breakdown

A failure or malfunction of machinery which leads to production halting and potential delays in operations.

Budgeted Output

The anticipated quantity of goods or services a company plans to produce in a specified period, usually tied to budgeting and planning processes.

Standard Cost

A predetermined or estimated cost of producing a product or service, used as a benchmark for measuring actual production costs.

Actual Production

The real quantity of products manufactured during a specific period, as opposed to planned or projected production.