Economists refer to private goods as

Step 1: Analyze the question The question asks about the two key features economists use to classify goods: rivalry and excludability.

Step 2: Explain the concepts

• Rivalrous: One person's consumption of the good reduces the amount available to others. If you eat a loaf of bread, no one else can eat it.
• Excludable: People who have not paid can be prevented from using the good.

The four types of goods:

| Type of good | Rivalry | Excludability | Example | |---|---|---|---| | Private good | Rivalrous | Excludable | Bread, clothes, a phone | | Public good | Non-rival | Non-excludable | Street lighting, national defence | | Common resource | Rivalrous | Non-excludable | Fish in the ocean, communal grazing land | | Club good | Non-rival | Excludable | Cable TV (DStv), a toll road |

Step 3: Apply to the options

• A. Rivalrous and non-excludable: This describes a common resource, not a private good.
• B. Rivalrous and excludable: This is a private good. The seller can stop you from taking it unless you pay, and once you consume it, others cannot.
• C. Non-rival and non-excludable: This describes a public good.
• D. Non-rival and excludable: This describes a club good.

Step 4: Answer Private goods are rivalrous and excludable, which is option B.

Exam tip: Think of buying a bottle of Pure Water at the market. You must pay (excludable), and once you drink it, nobody else can (rivalrous). Remember: Private = Pay and Pass-on-nothing, meaning the owner can exclude you, and your use leaves less for others. Public goods are the opposite on both counts.