The Free Rider Problem Refers to a Situation in Which

question 11

Multiple Choice

The free rider problem 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 subsidise the production of goods, such as education, that make society better off.
• D) markets fail to allocate resources efficiently when benefits outweigh costs.