A homeless family is given a government subsidy for an apartment in an affordable housing project. The apartment
A) is not subject to the principle of rival consumption.
B) is not a public good.
C) has widespread benefits and concentrated costs.
D) is subject to the free-rider problem.

Question

Quizplus · Accepted Answer

The apartment is not a public good because it is excludable - only the homeless family who received the subsidy can use it - and rivalrous - the apartment cannot be used by multiple families at the same time without causing congestion or interference. Therefore, it does not satisfy the two defining characteristics of a public good.

A Homeless Family Is Given a Government Subsidy for an Apartment