The Free-Rider Problem Occurs Because

question 32

Multiple Choice

The free-rider problem occurs because

• A) members of Congress are presented with many opportunities to amend a piece of legislation.
• B) the government subsidizes most forms of transportation in the United States.
• C) the benefits of a group's actions are available only to a specific segment of society.
• D) the benefits of a group's actions are broadly available and cannot be denied to nonmembers.
• E) members of Congress listen only to organized interest groups and not to public opinion polls.

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Definitions:

Net Saver

An individual or entity that saves more money than they spend or invest, contributing positively to their financial assets over time.

Utility-Maximizing

Represents the economic principle where individuals or firms make choices that result in the highest possible level of satisfaction or efficiency within their constraints.

Lender

An individual, institution, or entity that provides funds to another with the expectation that the funds will be repaid, often with interest.

Utility Function

A mathematical representation that ranks an individual's preferences over a set of goods and services.