Question: Which of the following is an example of a public good?
a. residential housing
b. national defense
c. restaurant meals
d. fish in the ocean
Solution: Public goods refer to those goods that are non-rivalry and non-exclusive in nature. These goods are common to every citizen. The consumption of these goods does not reduce the availability of that good to other individuals. It is not possible to charge a price from all the individuals who use that good.
Consumption of national defense by an individual does not reduce the availability to another individual. Thus, national defense is public good.
Hence, option ‘b’ is correct.