The Free Rider Problem Refers to a Situation in Which

question 205

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

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Definitions:

Strictly Enforced Rules

Rules or regulations that are rigorously upheld and imposed to ensure compliance.

Society

A structured community of people bound together by similar traditions, institutions, or nationality.

Sects

Relatively small religious groups that have branched off from a larger religion, often with distinct beliefs and practices diverging from mainstream traditions.

General Social Survey

A sociological survey conducted in the United States to collect data on demographic characteristics and attitudes covering a wide range of subjects.