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Public Adminstration QUESTION #9573
Question 1
The concept of 'public goods' is foundational to justifying government intervention in the economy. Which of the following best identifies a situation where a good that is technically public could lose its non-rival character?
  • A lighthouse in a busy shipping lane during normal traffic — its guidance signal is available to all ships without depletion
  • A public park at normal occupancy — all visitors can use it simultaneously without reducing others' enjoyment
  • A congested public road during peak hours — additional vehicles reduce traffic flow and increase travel time for all existing users✔️
  • National defence — the protection provided to one citizen does not reduce protection available to others
Correct Answer Explanation
Public goods are non-excludable (cannot prevent use) and non-rival (use by one does not reduce availability for others). Option C describes congestion — when a public road reaches capacity, additional users impose costs on existing users (reduced speed, increased travel time), making the good rival at the margin. This is the concept of 'congestible public goods' or 'club goods,' illustrating that non-rivalry is conditional on usage levels.