Question

Read the following statements carefully :
Statement 1: Public goods are those goods for which the payments are made by all the entities in the country.
Statement 2: Private goods are those goods which are provided by the government of a country at subsidised rates.
In the light of the given statements, choose the correct option from the following :

• A. Statement 1 is true and Statement 2 is false.
• B. Statement 1 is false and Statement 2 is true.
• C. Both Statements 1 and 2 are true.
• D. Both Statements 1 and 2 are false.

Hint:

Public goods are funded by taxes and benefit everyone in society, while private goods are usually sold by private entities to individuals.

Answer 1

The Correct Option is A

Statement 1 is true because public goods are non-rivalrous and non-excludable, meaning that they are provided for the benefit of the whole society, often funded by taxes.
Statement 2 is false because private goods are typically provided by private entities, not the government, and they are sold at market prices. The government may subsidize certain goods but does not provide them at subsidized rates as a general rule for all private goods.