the regional public goods initiated (RPG i) supports countries in Latin America and the Caribbean and has provided US$73 million finance for

The Regional Public Goods Initiative (RPGI) supports countries in Latin America and the Caribbean and has provided US$73 million in finance for the provision of public goods across the region.

RPGI supports countries in Latin America and the Caribbean region and has given US$73 million in financial support to help public goods across regions.

Please read the following literature and answer which of the following options for public goods is correct?

(Source: adapted from http-yAvww.iadb.org/en/topics/regional-integratiori/ what-is-the-regional-puWic-goods-program,2803.html)

A The private sector is able to exclude people from consuming public goods

B They may be under provided by the private sector

C There is vitality in the consumption of public goods

D They are only available to some consumers

(a) Answer

(b) Explanation

Please select the answer and explain.

Source: January 2015 Edexcel Examination Bureau I A-Level Stage Economics Examination Unit 1

Reference Answer : B

Explanation:

Definition of public goods: non-rivalrous and non-excludeable. Non-rivalrous means that consumers are not in competition regarding consumption the good; non-excludeable means that producers can not effectively exclude the non-payers from receiving the good.

Examples of public goods include street-lighting,national defence, etc.

A:the private sector can exclude the non-payers from receiving the good as the price act as a signal of resource allocation

B:due to the non-excludeable nature of public goods, suppliers have no incentive to produce them as they are unable to extractt profits from public goods due to free riding. Hence public goods are usually under-provided by the private sector suppliers

C:public good consumption is non-rivalrous

D:if public goods are only available to some consumers, this suggests exclude ability

problem-solving ideas

0 The best way to do multiple-choice questions is to use the exclusion method.

For this type of question candidates should pay attention to such statements, which may be talking about the characteristics of public goods. Clear errors The fastest way to choose will be to view all descriptions about private goods.

Don't forget, you should always start answering by the definition of the keywords given in the question.