When a Free-Rider Problem Exists

question 437

Multiple Choice

When a free-rider problem exists,

• A)the market will devote too few resources to the production of the good.
• B)the cost of the good will always be more than the benefit of the good.
• C)the good will not be produced.
• D)entrepreneurs will eventually find a way to make free-riders pay their share.

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Definitions:

Social Exchange Theory

A theoretical framework that posits social behavior is the result of an exchange process aimed at maximizing benefits and minimizing costs in relationships.

Systems Theory

An interdisciplinary theory about the nature of complex systems, emphasizing interconnections and the influence of subsystems on the whole.

Learning Theory

A conceptual framework that describes how individuals acquire, process, and retain knowledge through experience.

Elementary School

An institution for early education of children that typically covers kindergarten through fifth or sixth grade.