Which of the following is a critical rule for determining whether something is a public good?

The total benefits to society are greater than the total cost.

The benefits of the facility are greater for the society than for the individuals using it.

The total cost is small for each individual taxpayer.

The benefit to each individual who uses the facility is greater than the cost.

1 answer

The critical rule for determining whether something is a public good is:

The total benefits to society are greater than the total cost.

Public goods are characterized by two main properties: they are non-excludable (no one can be effectively excluded from using the good) and non-rivalrous (one person's use does not reduce its availability to others). Therefore, evaluating public goods involves analyzing their overall societal benefits in relation to the costs of providing them.