Which of the Following Is Not an Example of a Free

question 59

Multiple Choice

Which of the following is not an example of a free rider problem?

• A)Sally listens to public radio but never contributes to her local station.
• B)Fred benefits when the National Guard arrives to help create a flood wall around his town, but he is so poor that he pays no taxes.
• C)Joe works with two other students on a group project for his intermediate microeconomics class. The grade is based on a group paper, but Joe goes to a movie instead of working on the paper because he knows that the other group members will write it without him.
• D)John goes into his local corner shop and walks out with an apple without paying for it.

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Definitions:

Journal Entries

The records of financial transactions in the accounting system that document the effects on accounts in a double-entry bookkeeping system.

Dividend Yield

A metric showing the annual dividends a company distributes in comparison to its stock price.

Preferred Shareholders

Investors who own preferred shares in a company, usually entitled to dividends before common shareholders and with certain other financial rights.

Market Price

The current price at which an asset or service can be bought or sold in a market.