Asked by Amanda Rettenmaier on Jun 06, 2024
Verified
The free-rider problem makes it unlikely that poverty will be entirely eliminated through private charity.
Free-Rider Problem
A situation in public goods where individuals benefit without contributing due to non-excludability.
Private Charity
Voluntary giving by individuals or organizations to those in need, without government intervention or assistance.
- Acknowledge the existence of the free-rider problem and its effects on the functionality of markets.
Verified Answer
MD
Monae DenishJun 08, 2024
Final Answer :
True
Explanation :
The free-rider problem occurs when individuals or entities benefit from a good or service without paying for it or contributing to its provision, leading to underproduction of that good or service. In the context of private charity aimed at eliminating poverty, many might rely on others to contribute, resulting in insufficient funds and resources to fully address the issue.
Learning Objectives
- Acknowledge the existence of the free-rider problem and its effects on the functionality of markets.