What must be true about private goods?
Choose 1 answer:
(A) They are non-rival and non-excludable
(B) Governments sometimes produce them
(C) They suffer from the tragedy of the commons

D They do not exist in centrally planned economies
(E) They are only produced by monopolies

Question

What must be true about private goods?
Choose 1 answer:
(A) They are non-rival and non-excludable
(B) Governments sometimes produce them
(C) They suffer from the tragedy of the commons

D They do not exist in centrally planned economies
(E) They are only produced by monopolies

Accepted Answer

∻Solution∻ ‖ a ⋮ Definition of Private Goods: Private goods are defined by their excludability and rivalry in consumption. ‖ ‖ b ⋮ Analysis of Options: We evaluate each option against the definition of private goods. ‖ ‖ c ⋮ Option A Analysis: "Non-rival and non-excludable" describes public goods, not private goods. ‖ ‖ d ⋮ Option B Analysis: Governments can produce private goods, but this is not a defining characteristic. ‖ ‖ e ⋮ Option C Analysis: "Tragedy of the commons" typically applies to common resources, not private goods. ‖ ‖ f ⋮ Option D Analysis: Private goods can exist in centrally planned economies if the market allows for private ownership. ‖ ‖ g ⋮ Option E Analysis: Private goods are not exclusively produced by monopolies; they can be produced in competitive markets as well. ‖ ∻Answer∻ ⚹ Option B: Governments sometimes produce them ⚹ ∻Key Concept∻ ⚹ Private Goods Characteristics ⚹ ∻Explanation∻ ⚹ Private goods are characterized by being excludable and rival in consumption. While governments can produce private goods, this is not a defining feature, but it is true and does not contradict the definition of private goods. ⚹◊How does the concept of private goods impact the supply and demand dynamics in a macroeconomic model⍭ Generate me a similar question◊

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