A lighthouse is a public good:
A) because it doesn't cost any more to light the way for 105 ships than it does to light the way for 104 ships, but for no other reason.
B) because there is no way to prevent those who haven't contributed to the lighthouse from seeing better because of it, but for no other reason.
C) because the government produces it, and for no other reason.
D) for the reasons in A and B together.
E) for the reasons in A, B, and C together.

Question

Quizplus · Accepted Answer

A lighthouse is a public good because it exhibits both non-excludability (there is no way to prevent someone from benefitting from it) and non-rivalry (providing the light to an additional ship doesn't diminish the benefit to other ships). These characteristics are described in both options A and B. The fact that it is produced by the government (option C) does not necessarily make it a public good. Therefore, the answer is D - combining the reasons from options A and B.

A Lighthouse Is a Public Good