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.

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Definitions:

Fairness Concerns

Issues or discussions surrounding the equitable treatment, distribution of resources or opportunities, and justice in societal, economic, or individual contexts.

Subjective

Subjective pertains to personal opinions, feelings, or tastes, as opposed to objective facts or universal truths.

Overconfidence Effect

A cognitive bias where an individual's subjective confidence in their judgments is greater than their objective accuracy.

Framing Effects

In prospect theory, changes in people’s decision making caused by new information that alters the context, or “frame of reference,” that they use to judge whether options are viewed as gains or losses relative to the status quo.