Multiple Choice
Private goods exhibit two consumption characteristics: they are excludable and .
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8. The Types of Goods
Four Types of Goods and Two Characteristics
Multiple Choice
An audiobook is an example of a club good because it is:
A
non-excludable and rival in consumption
B
excludable but non-rival in consumption
C
excludable and rival in consumption
D
non-excludable and non-rival in consumption
Verified step by step guidance1
Step 1: Understand the definitions of key terms: A good is \(\textbf{excludable}\) if people can be prevented from using it if they do not pay, and \(\textbf{non-excludable}\) if they cannot be prevented. A good is \(\textbf{rival}\) if one person's consumption reduces the amount available for others, and \(\textbf{non-rival}\) if one person's consumption does not affect others' ability to consume it.
Step 2: Identify the characteristics of an audiobook: Since audiobooks are typically sold through platforms that require payment, they are \(\textbf{excludable}\) because access can be restricted to paying customers.
Step 3: Consider whether an audiobook is rival or non-rival: Because one person listening to an audiobook does not reduce the ability of others to listen to the same audiobook simultaneously, it is \(\textbf{non-rival}\) in consumption.
Step 4: Match these characteristics to the types of goods: A good that is excludable and non-rival is classified as a \(\textbf{club good}\).
Step 5: Conclude that an audiobook fits the definition of a club good because it is \(\textbf{excludable but non-rival in consumption}\).
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