Free Riding Refers to a Situation in Which

question 35

Multiple Choice

Free riding refers to a situation in which

• A)people consume a pure public good without payment, even though the good may not be produced if no one chooses to pay.
• B)the marginal cost of allowing additional consumers to consume a public good is zero.
• C)high income individuals subsidize the production of goods, such as education, that make society better off.
• D)markets fail to allocate resources efficiently when benefits outweigh costs.

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Definitions:

New Netherland

A 17th-century colonial province of the Dutch Republic that included parts of present-day New York, New Jersey, Delaware, and Connecticut.

Dutch Reformed Church

A Protestant Christian denomination originating in the Netherlands during the Reformation, known for Calvinist theology and significant presence in North America.

New Amsterdam

The 17th-century Dutch settlement that later became New York City, reflecting the early colonial history of the United States.

Mercantilism

An economic theory and practice common in Europe from the 16th to the 18th century, emphasizing national economic interests and the accumulation of wealth through a favorable balance of trade.