The __________ Problem Occurs When People Fail to Join a Group

question 44

Multiple Choice

The __________ problem occurs when people fail to join a group because they can get the benefits the group offers without contributing to the group's efforts.

• A)free rider
• B)pluralist
• C)collective good
• D)group coordination
• E)group formation

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Definitions:

Sunk Cost

A cost associated with a project expended prior to making the decision to undertake that project (for example, the cost of research into the idea). Since sunk funds are already gone, they cannot alter future costs or benefits, and should not be included in the analysis leading to a decision.

Opportunity Cost

The benefit foregone by using an asset in a particular way. Usually the income or benefit it would produce in its next best use.

Cash Outflow

Money going out of a business or individual's account, typically to pay for expenses, investments, or acquisitions.

Net Working Capital

Net working capital refers to the difference between a company's current assets and its current liabilities.