A Level Economics AQA Practice Exam

What best describes quasi-public goods?

1. Goods that are freely available to all

2. Goods that are both excludable and rivalrous

3. Goods that have significant positive externalities

4. Goods that cannot be consumed without payment

The correct answer is: Goods that have significant positive externalities

Quasi-public goods are characterized by having significant positive externalities, which means that their consumption benefits not only the individual consumer but also society at large. This is often the case with goods like education and public health services, where the benefits extend beyond the direct users to affect the overall social welfare positively. For instance, when more individuals receive education, the overall skill level of the workforce improves, leading to greater productivity and innovation that benefits the economy as a whole. The other descriptions do not align with the concept of quasi-public goods. Goods that are freely available to all do not account for the cost of provision and management, while goods that are both excludable and rivalrous describe private goods more accurately. Lastly, stating that goods cannot be consumed without payment implies exclusivity and direct payment, which typically relates to private goods rather than the characteristics that define quasi-public goods.