Public goods are those commodities from whose enjoyment nobody can be effectively excluded. Everybody is free to enjoy the benefits of these commodities, and one person's utilization docs not reduce the possibilities of anybody else' s enjoying the same good.
Examples of public goods are not as rare as one might expect.A flood control dam is a public goods.Once the dam is built,all persons living in the area will benefit—irrespective of their own contribution to the construction cost of the dam. The same holds true for highway signs or aids to navigation. Once a lighthouse is built, no ship of any nationality can be effectively excluded from the utilization of the lighthouse for navigational purposes. National defense is another example.Even a person who voted against military expenditures or did not pay any taxes will benefit from the protection afforded.
It is no easy task to determine the social costs and social benefits associated with public goods. There is no practicable way of charging drivers for looking at highway signs, sailors for watching a lighthouse,and citizens for the security provided to them through national defense.Because the market does not provide the necessary signals,economic analysis has to be substituted for the impersonal judgement of the marketplace.
1. Which of the following statements best describes the organization of the first two paragraphs？
ASuggestions for the application of an economic concept are offered.
BSeveral generalizations are presented from which various conclusions are drawn.
CPersuasive language is used to argue against a popular idea.
DA general concept is defined and then examples are given.
