If a Good Is Subject to the Free-Rider Problem and an Inefficiently

question 143

Multiple Choice

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) common resource.
• D) artificially scarce good.

---

Definitions:

Public Good

Goods that once provided to one consumer, can be accessed by others without additional costs, benefiting the entire community.

Free-rider Problem

A situation where individuals consume a good without paying for it, benefiting from the good or service without contributing to its cost.

Public Good

A good that is non-excludable and non-rivalrous, meaning that its use by one person does not reduce its availability to others and no one can be effectively excluded from using it.

Optimal Level

The most favorable balance or degree of any variable or condition for achieving maximum efficiency or effectiveness.