Types of Goods MCQ Quiz - Objective Question with Answer for Types of Goods - Download Free PDF

The correct answer is Driveway at our home.

Key Points

• Driveway at our home is considered a private good because it is excludable and rivalrous.
• Private goods are those that individuals can be excluded from using, and one person's use reduces its availability to others.
• Public goods, unlike private goods, are non-excludable and non-rivalrous, meaning they are available to everyone without reducing their availability to others.
• Examples of public goods include national defense, law enforcement, and access to clean air, which are available to all members of society without exclusion or depletion.

Additional Information

• Public Goods:
  • Non-excludable: Individuals cannot be excluded from using them.
  • Non-rivalrous: One person's use does not reduce availability to others.
  • Examples: National defense, public parks, street lighting.
  • Public goods often require government provision due to the free-rider problem.
• Private Goods:
  • Excludable: Only those who pay for them can use them.
  • Rivalrous: Consumption by one person reduces availability for others.
  • Examples: Food, clothing, personal electronics.
  • Private goods are typically provided by the market.
• Common Resources:
  • Non-excludable but rivalrous.
  • Examples: Fisheries, forests, clean water.
  • Overuse can lead to depletion, known as the "tragedy of the commons."
  • Require regulation to prevent over-exploitation.
• Club Goods:
  • Excludable but non-rivalrous.
  • Examples: Subscription TV, private parks.
  • Users can be excluded, but one user's consumption does not significantly affect others.
  • Require a membership or subscription fee.

The correct answer is free rider.

Key Points

• A free rider is a person who benefits from resources, goods, or services without paying for the cost of the benefit.
• This phenomenon commonly occurs with public goods, which are non-excludable and non-rivalrous.
• Free rider problem can lead to under-provision of public goods as there is no incentive for individuals to contribute voluntarily.
• Government intervention is often required to ensure the provision and maintenance of public goods due to the free rider problem.

Additional Information

• Non-excludable:
  • Non-excludable goods are those that individuals cannot be effectively excluded from using.
  • Examples include public parks, national defense, and clean air.
• Rivalrous:
  • Rivalrous goods are those that can only be used by one person at a time.
  • If one person consumes a rivalrous good, it reduces the amount available for others.
  • Examples include food, clothing, and cars.
• Private good:
  • Private goods are both excludable and rivalrous.
  • Owners can prevent others from using them, and their use by one person diminishes their availability to others.
  • Examples include personal electronics, houses, and personal vehicles.
• Free rider problem:
  • This occurs when individuals benefit from resources, goods, or services without paying for them.
  • It is particularly prevalent with public goods which are non-excludable and non-rivalrous.
  • Common solutions involve government intervention or collective action to provide the good and ensure everyone contributes.

The correct answer is Intermediate goodsKey Points

• Intermediate goods need further transformation in the economic process:
• Intermediate goods:
  • These are partially finished goods that are used to make other goods.
• They are also known as producer goods.
• Intermediate goods undergo further processing and transformation to become final goods.
• For example, a car component can be an intermediate good if it is incorporated into a vehicle, or a final good if it is sold to the consumer as a spare part.

Additional Information

•  Consumer durable goods
  • A type of consumer good that lasts for more than three years and is purchased infrequently.
  • Examples include appliances, cars, and furniture. 
• Finished goods
  • A finished product that is purchased by consumers for personal or household use.
  • Examples include food, clothing, vehicles, electronics, and appliances. 
• Capital goods
  • A tangible product that is used to produce goods and services, and is not typically sold to consumers.
  • Examples include buildings, machinery, vehicles, large tools, and equipment

The correct answer is Capital goods.Key Points

• Machines, tools, and implements, and buildings are examples of capital goods.
• Capital goods are the goods that are used in the production of other goods and services.
• These goods are also known as durable goods, as they have a long lifespan and are used repeatedly in the production process.
• Capital goods are an important factor in the growth of an economy, as they increase the efficiency of production and lead to increased output.

Additional Information

• Consumer goods are the goods that are used by individuals for personal consumption. 
• Intermediate goods are partially finished goods that are used as inputs in the production of other goods. They are not sold directly to consumers, but rather are used to make finished goods that are then sold to consumers Inferior goods are the goods whose demand decreases with an increase in income.
• Hence, the correct option is 4) Capital goods.

The correct answer is Capital goods.Key Points

• Machines, tools, and implements, and buildings are examples of capital goods.
• Capital goods are the goods that are used in the production of other goods and services.
• These goods are also known as durable goods, as they have a long lifespan and are used repeatedly in the production process.
• Capital goods are an important factor in the growth of an economy, as they increase the efficiency of production and lead to increased output.

Additional Information

• Consumer goods are the goods that are used by individuals for personal consumption. 
• Intermediate goods are partially finished goods that are used as inputs in the production of other goods. They are not sold directly to consumers, but rather are used to make finished goods that are then sold to consumers Inferior goods are the goods whose demand decreases with an increase in income.
• Hence, the correct option is 4) Capital goods.

The correct answer is Capital goods.Key Points

• Machines, tools, and implements, and buildings are examples of capital goods.
• Capital goods are the goods that are used in the production of other goods and services.
• These goods are also known as durable goods, as they have a long lifespan and are used repeatedly in the production process.
• Capital goods are an important factor in the growth of an economy, as they increase the efficiency of production and lead to increased output.

Additional Information

• Consumer goods are the goods that are used by individuals for personal consumption. 
• Intermediate goods are partially finished goods that are used as inputs in the production of other goods. They are not sold directly to consumers, but rather are used to make finished goods that are then sold to consumers Inferior goods are the goods whose demand decreases with an increase in income.
• Hence, the correct option is 4) Capital goods.

The correct answer is Intermediate goodsKey Points

• Intermediate goods need further transformation in the economic process:
• Intermediate goods:
  • These are partially finished goods that are used to make other goods.
• They are also known as producer goods.
• Intermediate goods undergo further processing and transformation to become final goods.
• For example, a car component can be an intermediate good if it is incorporated into a vehicle, or a final good if it is sold to the consumer as a spare part.

Additional Information

•  Consumer durable goods
  • A type of consumer good that lasts for more than three years and is purchased infrequently.
  • Examples include appliances, cars, and furniture. 
• Finished goods
  • A finished product that is purchased by consumers for personal or household use.
  • Examples include food, clothing, vehicles, electronics, and appliances. 
• Capital goods
  • A tangible product that is used to produce goods and services, and is not typically sold to consumers.
  • Examples include buildings, machinery, vehicles, large tools, and equipment

The correct answer is free rider.

Key Points

• A free rider is a person who benefits from resources, goods, or services without paying for the cost of the benefit.
• This phenomenon commonly occurs with public goods, which are non-excludable and non-rivalrous.
• Free rider problem can lead to under-provision of public goods as there is no incentive for individuals to contribute voluntarily.
• Government intervention is often required to ensure the provision and maintenance of public goods due to the free rider problem.

Additional Information

• Non-excludable:
  • Non-excludable goods are those that individuals cannot be effectively excluded from using.
  • Examples include public parks, national defense, and clean air.
• Rivalrous:
  • Rivalrous goods are those that can only be used by one person at a time.
  • If one person consumes a rivalrous good, it reduces the amount available for others.
  • Examples include food, clothing, and cars.
• Private good:
  • Private goods are both excludable and rivalrous.
  • Owners can prevent others from using them, and their use by one person diminishes their availability to others.
  • Examples include personal electronics, houses, and personal vehicles.
• Free rider problem:
  • This occurs when individuals benefit from resources, goods, or services without paying for them.
  • It is particularly prevalent with public goods which are non-excludable and non-rivalrous.
  • Common solutions involve government intervention or collective action to provide the good and ensure everyone contributes.

The correct answer is Driveway at our home.

Key Points

• Driveway at our home is considered a private good because it is excludable and rivalrous.
• Private goods are those that individuals can be excluded from using, and one person's use reduces its availability to others.
• Public goods, unlike private goods, are non-excludable and non-rivalrous, meaning they are available to everyone without reducing their availability to others.
• Examples of public goods include national defense, law enforcement, and access to clean air, which are available to all members of society without exclusion or depletion.

Additional Information

• Public Goods:
  • Non-excludable: Individuals cannot be excluded from using them.
  • Non-rivalrous: One person's use does not reduce availability to others.
  • Examples: National defense, public parks, street lighting.
  • Public goods often require government provision due to the free-rider problem.
• Private Goods:
  • Excludable: Only those who pay for them can use them.
  • Rivalrous: Consumption by one person reduces availability for others.
  • Examples: Food, clothing, personal electronics.
  • Private goods are typically provided by the market.
• Common Resources:
  • Non-excludable but rivalrous.
  • Examples: Fisheries, forests, clean water.
  • Overuse can lead to depletion, known as the "tragedy of the commons."
  • Require regulation to prevent over-exploitation.
• Club Goods:
  • Excludable but non-rivalrous.
  • Examples: Subscription TV, private parks.
  • Users can be excluded, but one user's consumption does not significantly affect others.
  • Require a membership or subscription fee.