The free rider problem arises when a good is _______ and the tragedy of the commons arises when a good is ________________.
A)nonexcludable; both rival and nonexcludable
B)rival; both rival and nonexcludable
C)both rival and nonexcludable; rival
D)both rival and nonexcludable; excludable

Question

Quizplus · Accepted Answer

The free rider problem occurs with nonexcludable goods, where it's impossible or impractical to exclude anyone from using the good, leading to under-provision as individuals can benefit without paying. The tragedy of the commons arises with goods that are both rival (one person's use diminishes others' use) and nonexcludable, leading to overuse and depletion of the resource.

The Free Rider Problem Arises When a Good Is _______