Q. With reference to public goods, consider the following statements:

1. They are non-excludable
2. They are non-rivalrous
3. They suffer from the free-rider problem

Which of the above statements is/are correct?
Answer: 1, 2 and 3
Notes: Public goods are defined by non-excludability (cannot exclude users), non-rivalry (one's use does not reduce availability for others), and suffer from the free-rider problem since people can benefit without paying. Examples include national defence and street lighting. All these characteristics are essential features of public goods as per economic theory.