Free Riding

question 59

Multiple Choice

Free riding

• A) is possible if the consumption of a good is characterized by excludability.
• B) is possible if the consumption of a good is characterized by nonexcludability.
• C) is characteristic of private goods.
• D) occurs when consumers pay too much for services provided by government.

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Definitions:

Expected Value Theory

A mathematical concept that calculates the average outcome when the future includes scenarios that may or may not happen, widely used in decision-making processes.

Lottery Ticket

A form of gambling that involves the drawing of numbers for a prize.

Odds of Winning

A numerical expression that represents the likelihood of winning a game, bet, or any situation where there is a competition with a possible outcome.

Representativeness Heuristic

A cognitive bias in decision making where the likelihood of an event is judged based on how similar it is to the population it came from, often leading to errors in judgment.