In Which Situation Does a Free Rider Problem Occur

question 40

Multiple Choice

In which situation does a free rider problem occur?

• A) Someone benefits from a good but does not have to pay for it.
• B) Pollution is generated by the production of a good.
• C) Policymakers ignore opportunity costs when making decisions.
• D) A firm does not advertise its own product because its customers recommend it to their friends.

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Definitions:

Unreported Crime

Crimes that are not reported to law enforcement agencies and therefore not included in official crime statistics.

Street Crime

Offenses that occur in public places and are often violent in nature, such as robbery, assault, and vandalism.

Decreased Business Surveillance

The reduction in monitoring and collecting data on the activities and communications of businesses.

Subcultural Theory

Argues that gangs are a collective adaptation to social conditions. Distinct norms and values that reject the legitimate world crystallize in gangs.