The Free-Rider Problem Exists Because

question 31

Multiple Choice

The free-rider problem exists because

• A) some goods or services are rival and leave some people without them.
• B) some goods or services are excludable and cause envy for those who don't have them.
• C) people must all consume the same public good and so everyone wants to pay for it.
• D) private goods or services cause some people to want to take them for free.
• E) people cannot be excluded from consuming public goods even if they don't pay for them.

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Definitions:

Marginal Utility

The extra pleasure or benefit received from using an additional unit of a product or service.

Consumer Surplus

The financial gap between the potential spending by consumers on a product or service versus their actual spending.

Marginal Utility

The added enjoyment or advantage gained by using one more unit of a good or service.

Marginal Utility

The additional satisfaction or benefit received by consuming one more unit of a good or service.