A Free Rider Problem Occurs When

question 60

Multiple Choice

A free rider problem occurs when

• A) a public good is provided by government.
• B) not everyone works toward a common goal.
• C) the market provides a good by making it free of charge.
• D) government officials offer bailouts to failing corporations that come at the expense of taxpayers.

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Definitions:

Utility Function

A mathematical representation of how consumers rank different bundles of goods according to the level of satisfaction or utility those bundles provide.

Risk Averse

describes a preference for avoiding risk, where individuals opt for the option with the least uncertainty in outcomes or potential losses.

Subjective Measure

A type of data collection or evaluation based on personal opinions, interpretations, points of view, emotions, and judgment.

Present Value

The present value is the current worth of a future sum of money or stream of cash flows given a specified rate of return.