SSC CHSL 2025 PYQ — Question 89

The correct answer is Option 4: Generally, everyone benefits from public goods.
Explanation:

• In economics, public goods are goods or services that are equally available to all members of society.
• Option 4 (Why it is correct): The benefits of public goods are 'non-excludable.' This means that no one can be excluded from using them, regardless of whether they have paid for them or not. Examples include: street lighting, national defense, or clean air.
• Option 1 (Why it is incorrect): Clothing is an example of a 'private good' because it can only be used by the person who has purchased it.
• Options 2 and 3 (Why they are incorrect): Public goods typically cannot be provided through private transactions via the market mechanism due to the 'free-rider' problem. People are unwilling to pay for them because they know they can enjoy the benefits without paying. Therefore, they are usually provided by the government through taxation.
• Two Main Characteristics of Public Goods:
• Non-rivalrous: Consumption of the good by one person does not diminish its availability for another person. (Example: fresh air in a park).
• Non-excludable: It is impossible, or prohibitively expensive, to prevent any individual from enjoying the benefits of the good. (Example: police protection).

Additional Facts (For Exams):

• The Free-Rider Problem: This occurs when individuals enjoy the benefits of a resource without paying for it. This constitutes the greatest challenge associated with public goods.
• Merit Goods: These are goods that the government believes people *should* consume (such as education and healthcare), even if they do not strictly qualify as public goods. Important Questions for Upcoming Examinations:

Question: Which of the following is a Pure Public Good?
Answer: National Defence.
Question: In which type of goods is the 'free-rider' problem primarily observed?
Answer: Public goods.
Question: By whom is the provision of public goods primarily undertaken?
Answer: By the government.