The correct answer is 'Option D'.
The free rider problem exists when the consumers 'free ride' on a public good which means that they don't pay for the good but enjoy the benefits of that good. This is because the public goods are non-excludable which means that nobody can be excluded from having access to that good. So, the free rider problem exists because the public goods are non-excludable. Therefore, the correct answer is 'Option D'.
The "free rider problem" arises from the fact that a public good asymmetric rivalrous excludable nonexcludable...
Which of the following statements is (are) correct? (x) A good is nonexcludable if it is prohibitively costly to prevent people from using it. (y) When a good is rivalrous in consumption, it means that one person’s use of the good will not diminish another person’s ability to use it, and, as a consequence, more than one person can use the good at the same time. (z) A shirt would be considered a private good because it is excludable and...
7) Free riding can occur if a good is A) nonexcludable and nonrival. B) excludable and rival. C) a private good. D) nonexcludable and rival E) excludable and nonrival.
69. Which of the following is the best example of a public good? a. Music downloads b. Designer clothes c. Natural forests d. National defense 70. A street light is a ________. a. common pool resource good b. club good c. private good d. public good 71. A congested street is ________ in consumption. a. non-excludable but rival b. non-excludable and non-rival c. excludable but non-rival d. excludable and rival 72. The free-rider problem exists for goods that are ________....
Which of the following statements is (are) correct? (x) Both public goods and club goods are nonrivalrous in consumption but club goods are excludable and public goods are nonexcludable and both common resources and private goods are rivalrous in consumption but private goods are excludable and common resources are nonexcludable. (y) Ralph owns 10 acres of beautiful wooded land. Ralph donates the land to the state with the understanding that the land will be used as a state park. This...
What is the free-rider problem and how is it related to public goods?
1). Which of the following is not a consideration when attempting to eliminate a free rider problem or tragedy of the commons problem? Multiple Choice Something must be done to alter individuals' trade-offs. Market participants must internalize the value of the externality. Firms must be forced to provide the good or service at a price that is below profit maximizing price. The social costs must be realized by the individual. 2). Which of the following is not an example of...
The individuals and society both face an economic problem. This problem arises from the fact that: individuals and institutions behave only in their self-interest. resources are scarce relative to individual's wants. wants are limited but the resources are not. both wants and resources are unlimited.
Usually, the Smithsonian Museum (which is free to enter) is a good example of a public good. However, when the museum gets crowded, it is a better example of a(n): A. artificially scarce good B. excludable good C. nonrival good D. private good. E. common property resource
A free-rider problem exists when A. a private good is produced B. negative externalities exist C. people receive a benefit for which they do no need to pay D. firms impose a cost on third parties E. any market is in equilibrium
Which of the following is a disadvantage of government provision of a public good such as national defense? (i)The government does not know the exact willingness of consumers to pay for the public good. (ii)The free-rider problem is more likely to occur when the government provides a public good than when the private sector provides a public good. (iii)Taxpayers do not agree on the optimal quantity of the public good that the government should provide.