The Free Rider Problem Is a Situation in Which

question 14

Multiple Choice

The free rider problem is a situation in which

• A)effluents such as CFCs combine with ozone and decrease concentrations of that protective chemical.
• B)one agent secures benefits that others pay for.
• C)there are excessive subsidies given to polluting buses or other forms of mass transit.
• D)perfect property rights exist.

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Definitions:

Liability

A present obligation of the entity to transfer an economic resource as a result of past events.

Equity

The value of an owner's interest in a property or business, after subtracting liabilities.

Financial Asset

An asset that derives value from a contractual claim, such as cash, ownership interest in an enterprise, a bond, stock, or right to receive cash from a contract.