Which is an example of a private good?

Which is an example of a private good?

• A. A local restaurant.
• B. A public park.
• C. National defense.
• D. Public library.

Answer: (A)

Private goods are excludable and rivalrous. A local restaurant fits this because you have to pay to eat there and a seat or a meal is used up by you—one person’s use means others can’t use the same meal or table at the same time. That combination of being able to exclude people and having consumption by one person reduce the availability for others is what makes it a private good. The other options aren’t private goods in the same way: a public park is open to everyone and isn’t limited to paying customers, national defense protects everyone and no one can be excluded, and a public library is a shared service with access rules and lending limits but doesn’t function as a simple private good like a restaurant does.

Private goods are excludable and rivalrous. A local restaurant fits this because you have to pay to eat there and a seat or a meal is used up by you—one person’s use means others can’t use the same meal or table at the same time. That combination of being able to exclude people and having consumption by one person reduce the availability for others is what makes it a private good. The other options aren’t private goods in the same way: a public park is open to everyone and isn’t limited to paying customers, national defense protects everyone and no one can be excluded, and a public library is a shared service with access rules and lending limits but doesn’t function as a simple private good like a restaurant does.