UPSC CAPF (AC) 2024 Paper I · Question 103
Question 103 of the UPSC CAPF (AC) 2024 Paper I (4 August 2024). Try it first, then open the answer and explanation.
Consider the following statements regarding Public Goods and Externalities : 1. Non-rivalry and non-excludability are two characteristics of Public Goods 2. Market can provide the optimal amount of a good in the presence of externalities Which of the statements given above is/are correct?
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
सार्वजनिक वस्तुओं और बाह्यताओं (externalities) के संबंध में निम्नलिखित कथनों पर विचार कीजिए : 1. गैर-प्रतिद्वंद्विता और गैर-बहिष्करणीयता, दोनों सार्वजनिक वस्तुओं की विशेषताएं हैं 2. बाह्यताओं की विद्यमानता की स्थिति में बाजार किसी वस्तु की इष्टतम मात्रा उपलब्ध करा सकता है उपर्युक्त में से कौन-सा/कौन-से कथन सही है/हैं?
- केवल 1
- केवल 2
- 1 और 2 दोनों
- न तो 1, न ही 2
Show answer
Answer: (1) 1 only
उत्तर: (1) केवल 1
Public goods are non-rival (one person's use does not reduce another's) and non-excludable (no one can be kept from using them), so statement 1 is correct. Externalities cause market failure: goods with negative externalities are over-produced and those with positive externalities under-produced, so the market does not reach the optimal amount and statement 2 is wrong.