Asked by Haktan Öztürkçü on May 06, 2024
Verified
The pollution market failure is an example of the free rider problem.
Pollution Market Failure
Pollution market failure occurs when the environmental costs of pollution are not reflected in the market prices of goods or services, leading to overconsumption and excessive pollution.
Free Rider Problem
The issue arising when individuals benefit from resources, goods, or services without paying for them, which can lead to under-provision of those goods or services.
- Recognize the issue of free-riding and its consequences on the delivery of public services.
Verified Answer
ZK
Zybrea KnightMay 07, 2024
Final Answer :
False
Explanation :
Pollution market failure is primarily an example of a negative externality, where the social costs of pollution are not fully borne by the producers or consumers of polluting goods, but rather by society at large. The free rider problem, on the other hand, typically refers to situations where individuals can benefit from a good without paying for it, leading to under-provision of that good.
Learning Objectives
- Recognize the issue of free-riding and its consequences on the delivery of public services.