Consider the following statements regarding public goods:
(A) Public good is nonexclusive
(B) Public good is national defense
(C) Public good is rival
(D) Public good provides benefits to people at non-zero marginal cost
(E) Public good creates inefficiency in consumption
Choose the correct answer from the options given below:

Correct option is A

Correct Option: (1) (A) and (B) only
Explanation: A public good is characterized by two main properties:
1. Non-excludability – It is impossible to prevent anyone from using the good once it is provided.
2. Non-rivalry – One person’s use of the good does not reduce its availability to others.
Information Booster:
1. Statement (A) is correct: Public goods are nonexclusive.
2. Statement (B) is correct: National defense is a classic example of a public good.
Additional Knowledge:
1. Statement (C) is incorrect: Public goods are non-rival, not rival.
2. Statement (D) is incorrect: The marginal cost of providing a public good to an additional person is zero.
3. Statement (E) is incorrect: Public goods themselves do not inherently create inefficiency in consumption; rather, their underprovision in the market leads to inefficiency.