The Free-Rider Problem Arises

question 3

Multiple Choice

The free-rider problem arises

• A) when people feel their contribution is so small relative to the total amount needed that it won't make a difference whether they contribute or not.
• B) when people realize they will still receive the benefits of a good whether they pay for it or not.
• C) whenever the government produces a good or service.
• D) whenever there is a surplus of the product in the market.

---

Definitions:

Infringement Suit

A legal case brought against an individual or company for violating a patent, copyright, trademark, or other intellectual property rights.

Legal Expenses

Costs incurred by a business for legal services, such as attorney fees and court costs.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets, representing the company's reputation, brand, or similar factors.

Internally Generated

Refers to assets, revenues, or values created through the operations and activities of the company, not through external acquisition.