Asked by Jessica Green on May 02, 2024
Verified
Because people enjoy the benefits of public goods whether they pay for them or not, people are usually ________ to pay for them. This is known as the free-rider problem, and is intrinsic to ________ goods.
A) willing; private
B) willing; public
C) unwilling; private
D) unwilling; public
Free-rider Problem
A situation where individuals consume a good without paying for it, benefiting from the good or service without contributing to its cost.
Public Good
A good that is non-excludable and non-rivalrous, meaning that its use by one person does not reduce its availability to others and no one can be effectively excluded from using it.
- Identify and explain the free-rider problem associated with public goods.
Verified Answer
AW
Avery WalterMay 06, 2024
Final Answer :
D
Explanation :
Public goods are non-excludable and non-rivalrous, meaning people cannot be easily excluded from using them and one person's use does not reduce availability for others. This leads to the free-rider problem, where individuals may benefit from goods without contributing to their cost, making people generally unwilling to pay for them voluntarily.
Learning Objectives
- Identify and explain the free-rider problem associated with public goods.