Which of the Following Is an Example of the Free-Rider

question 230

Multiple Choice

Which of the following is an example of the free-rider problem?

• A)Both Fred and Wilma receive low-cost dental care at the local dental school, so neither of them pays the full cost of the care.
• B)Elmer receives a free lunch from the local "Meals on Wheels" program because of his low monthly income.Yet his next door neighbor, Dorothy, is not eligible for the free lunch.
• C)Max owns Fido, a large dog who barks whenever anyone walks near his house.Sally lives next to Max, and Fido's barking can be heard whenever anyone walks near her house, too.Thus, Sally receives free protection from burglars because of Fido's barking.
• D)Both David and Carolyn can enjoy a beautiful sunset from the porches of their adjacent houses, yet neither of them pays to watch the sunset.

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Definitions:

Equilibrium Price

A financial point in the marketplace where goods supplied and goods demanded are identical in quantity.

Price Floor

A price floor is a minimum price set by the government or another body, below which the price of a product cannot fall.

Airline Tickets

Documents issued by an airline or a travel agency to confirm an individual's purchase of a seat on a flight on an aircraft.

Labor Markets

Marketplaces where labor is traded for wages, involving the interaction between employers who offer jobs and workers who offer their labor.