Public Goods Create a Free-Rider Problem Because

question 78

Multiple Choice

Public goods create a free-rider problem because

• A) only people who pay for the good or service can enjoy the good or service.
• B) people do not want to consume public goods.
• C) the good or service is rival in nature.
• D) the good or service is excludable.
• E) people can enjoy the good or service no matter whether or not they pay for it.

---

Definitions:

Interest Rate

The percentage of principal charged by the lender for the use of its money.

Budget Constraint

An economic model that outlines the combination of goods and services a consumer can purchase given their income and the prices of those goods and services.

Consumption

is the act of using goods and services to satisfy needs or desires, often discussed in the context of consumer behavior in economics.

Earnings

The amount of money received by an individual or organization in return for labor or services provided, or from investments.