In microeconomics, goods that are excludable include which combination of goods?

Introduction / Context:
In microeconomics, goods are often classified based on two characteristics: excludability and rivalry in consumption. Excludability refers to whether it is possible to prevent people who have not paid from using the good. This classification helps economists analyse market failures and the appropriate role of government. The question asks you to identify which categories of goods are excludable, meaning users can be denied access if they do not pay.

Given Data / Assumptions:
- The focus is on excludable goods. - The categories mentioned are public goods, common resources, private goods and natural monopolies. - We assume standard textbook definitions of these categories. - We must select the combination that consists of excludable goods.

Concept / Approach:
Private goods are both excludable and rival. Examples include food, clothing and cars; if you do not pay, you can be lawfully excluded from consuming them. Natural monopolies, such as utilities supplied through a network, are typically excludable but non rival over their relevant range of output. The supplier can restrict access by connecting only paying customers to the network, for example by using meters or subscriptions. Public goods, such as national defence and street lighting, are non excludable and non rival. Once provided, it is difficult or very costly to prevent individuals from benefiting regardless of payment. Common resources, such as fisheries or public grazing land, are non excludable but rival, meaning people can use them without paying, but one person's use reduces availability for others. Therefore, the excludable categories are private goods and natural monopolies.

Step-by-Step Solution:
Step 1: Recall the excludable versus non excludable dimension. Ask whether it is feasible to prevent non payers from using the good. Step 2: Consider private goods. It is normally easy to exclude non payers, so private goods are excludable. Step 3: Consider natural monopolies like cable television or piped water. Providers can restrict access by not providing connections or access codes, so these goods are also excludable. Step 4: Recognise that public goods and common resources are defined as non excludable, so any combination that includes them cannot represent the category of excludable goods. This leads to selecting the option that pairs private goods and natural monopolies.

Verification / Alternative Check:
Think of practical examples. If you do not pay your electricity bill, the supplier can disconnect your connection, demonstrating excludability for a natural monopoly. If you do not buy a sandwich, you cannot legally consume it, showing excludability for a private good. On the other hand, you cannot be easily excluded from enjoying national defence or clean street lighting, nor can people be easily excluded from fishing in an open access lake, illustrating non excludability for public goods and common resources. These examples confirm that private goods and natural monopolies are the excludable categories.

Why Other Options Are Wrong:
Public goods and common resources: Both are non excludable by definition, so this combination cannot represent excludable goods. Common resources and private goods: This mixes one non excludable category (common resources) with an excludable category, so it is not correct for goods that are excludable. Natural monopolies and public goods: Public goods are non excludable, so the pair does not consist entirely of excludable goods.

Common Pitfalls:
A common mistake is to confuse rivalry with excludability. Some students remember that common resources are rival and incorrectly assume they are excludable as well. Another pitfall is assuming that because natural monopolies often face regulation, they must be public goods; in reality they are usually excludable and are often privately owned but regulated natural monopoly providers. Keeping a clear mental matrix with excludable or non excludable on one axis and rival or non rival on the other helps avoid such confusion.

Final Answer:
The correct option is Private goods and natural monopolies, because both categories are excludable, meaning that non paying users can be prevented from consuming the good.