Asked by
Travis Patteson
on Oct 26, 2024
Verified
If a good is subject to the free-rider problem and an inefficiently low level of production when left to the private market,the good must be a(n) :
A) private good.
B) public good.
C) illegal good
D) artificially scarce good.
Free-rider Problem
The free-rider problem occurs when individuals benefit from resources, goods, or services without paying for them, leading to underprovision of those goods or services.
Public Good
A good that is non-excludable and non-rivalrous, meaning it can be used simultaneously by more than one person without reducing its availability to others.
- Detail the free-rider problem and its implications for the provision of public goods.
- Understand the dynamics of how private markets’ treatment of nonexcludable and nonrival goods precipitates market dysfunction.
Verified Answer
JD
Learning Objectives
- Detail the free-rider problem and its implications for the provision of public goods.
- Understand the dynamics of how private markets’ treatment of nonexcludable and nonrival goods precipitates market dysfunction.