Which of the following is a classic example of a public good?

• A. A toll road with unlimited capacity.
• B. National defense.
• C. Private cable service.
• D. A private club.

Answer: (B)

Public goods are nonexcludable and nonrival in consumption. National defense fits this because once it’s provided, everyone in the country benefits, and you can’t realistically exclude individuals from that protection or have one person’s protection reduce another’s. In contrast, a toll road is excludable because road use can be charged, and it can become rivalrous if congestion reduces quality for others. Private cable service and a private club are both excludable and rivalrous, since access can be restricted and more users can diminish benefit or capacity. So national defense is the classic example of a public good.