The ________ problem of public goods occurs because people can enjoy the benefits of these goods even when they do not have to pay for them.

Question

Quizplus · Accepted Answer

The free-rider problem arises when individuals can benefit from a public good without contributing towards its provision. As a result, some individuals may choose not to pay for the good, leading to under-provision or inadequate funding of the public good. Moral hazard refers to the risk-taking behavior of individuals due to reduced accountability for their actions, free-hand is not a recognized economic term, and external cost refers to the negative impact of economic activity on third parties.

The ________ Problem of Public Goods Occurs Because People Can