The Free-Rider Problem Is Encountered When

question 31

Multiple Choice

The free-rider problem is encountered when

• A) someone benefits from the consumption of a public good without paying his or her full share.
• B) all individuals who consume a public good pay for it.
• C) all goods consumed and produced are private goods.
• D) all individuals are willing to pay for what they consume.

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Definitions:

P(A or B)

The probability that at least one of two events A or B occurs.

Outcome

The result or consequence of an action, experiment, or situation.

Conditional Probability

The probability of one event occurring with some relationship to one or more other events.

P(A|B)

The probability of event A occurring given that event B has already occurred, representing a conditional probability.