A free-rider problem arises whenever:
A)goods cannot be provided exclusively to those who pay for them.
B)the price of a good is very low.
C)the government provides goods or services.
D)goods cease to be scarce.

Question

A free-rider problem arises whenever:
A)​goods cannot be provided exclusively to those who pay for them.
B)​the price of a good is very low.
C)​the government provides goods or services.
D)​goods cease to be scarce.

Quizplus · Accepted Answer

A free-rider problem occurs when individuals can benefit from a public good without contributing to its provision. Public goods are non-excludable, which means that it is difficult or impossible to exclude individuals from using or consuming them, even if they do not pay for them. This leads to a situation where some individuals may choose to free-ride and not contribute to the public good, which can lead to under-provision of the good.

A Free-Rider Problem Arises Whenever