Question

Which one of the following is a primary difference between a public good and a private good? 

1. Private goods are purchased by money transfers while public goods are purchased by in-kind transfers. 

2. A private good is subject to the free-rider problem while a public good is not. 

3. Private goods are manufactured because of the workings of the price system while public goods come about through antitrust legislation. 

4. Private goods are subject to the principle of rival consumption while public goods are not.