Asked by Amber Koeuth on Jul 07, 2024
Verified
Because people can enjoy the benefits of public goods whether they pay for them or not, they are usually unwilling to pay for them. This is known as the
A) drop-in-the-bucket problem.
B) nonexcludable problem.
C) nonrival problem.
D) free-rider problem.
Free-Rider Problem
A situation where some individuals consume more than their fair share of a public resource, or shoulder less of the cost of its production, benefiting from it without paying for it.
- Comprehend the issue of free-riders and its importance in the provision of public goods.
Verified Answer
MA
michael ayalaJul 09, 2024
Final Answer :
D
Explanation :
The free-rider problem occurs when individuals can enjoy the benefits of a public good without paying for it, leading to underprovision of that good since people have an incentive to avoid paying if they can still benefit.
Learning Objectives
- Comprehend the issue of free-riders and its importance in the provision of public goods.