National defense is a public good because

• A. It is excludable and nonrival
• B. It is nonexcludable and nonrival
• C. It has high private demand
• D. It is subject to price discrimination

Answer: (B)

Public goods are defined by two features: nonexcludability and nonrivalry. National defense fits both. Once defense is provided, you can’t realistically exclude individuals from being protected, and one person’s protection does not reduce another person’s protection. Because it’s nonexcludable and nonrival, the market will underprovide it, which is why government funding and collective provision are common. The other statements miss the defining traits: excludable and nonrival would allow charging for protection and imply rivalry in consumption, which defense does not have; high private demand doesn’t by itself define a public good, and price discrimination is about pricing, not the good’s nature.