Which of the Following Best Describes the Free-Rider Problem

question 9

Multiple Choice

Which of the following best describes the free-rider problem?

• A) Everyone would be better off if everyone refrained from pursuing self-interest.
• B) People can sometimes enjoy common goods without contributing to them.
• C) A person who receives welfare from the government thereby loses the incentive to work.
• D) Industrious people always attract others who try to capitalize on their success.

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Definitions:

GDP

Gross Domestic Product, a measure of the economic performance of a country, calculated as the total value of all goods and services produced within the country in a specific time period.

Unfunded Promises

Commitments or obligations, especially by a government, for which no money has been set aside to fulfill them.

Economic Theory

A set of principles and frameworks that aim to explain and predict the behaviors of individuals, firms, and governments in an economy.

Social Security

A government program that provides financial assistance to people with inadequate or no income, especially the elderly, disabled, and unemployed.