Distinguish between rival and non-rival goods with an example.

• A. Rival goods do not affect availability; non-rival goods reduce availability.
• B. Rival goods reduce availability with consumption (a sandwich); non-rival goods do not (a broadcast signal).
• C. All non-rival goods are excludable.
• D. Non-rival goods are always free.

Answer: (B)

The main idea here is understanding how consumption affects availability. A rival good is one where when someone uses it, there’s less of it left for others. A non-rival good can be consumed by many people at the same time without reducing what’s available for anyone else.

The example shows this clearly: a sandwich is rival because once someone eats it, it’s gone for others. A broadcast signal is non-rival because many people can watch it simultaneously; one person’s viewing doesn’t reduce the ability of others to view.

Other statements don’t fit the concept. It’s not true that rival goods don’t affect availability or that all non-rival goods are excludable; non-rival goods can be non-excludable (and some can be priced) as well. It’s also not true that non-rival goods are always free.