Which of the following is an example of the free-rider problem?
A. a fast food employee who is provided food at work
B. a student who refuses to buy a college catalog
C. a neighbor who refuses to help pay for a street light that is intended to help reduce crime
D. a law enforcement officer who receives a uniform from the police department
Answer: C
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A social system in which rights are clearly defined and participants are free to exchange as they choose will tend to allocate resources to
A) their most efficient uses. B) their most highly valued uses. C) uses on which the highest monetary value is placed. D) uses which maximize social welfare. E) uses which produce the greatest good for the greatest member.
If production displays diseconomies of scale, the long-run average cost curve is
A) above the long-run marginal cost curve. B) downward sloping. C) above the short-run average total cost curve. D) upward sloping.
Requiring Medicare participants to pay a small fraction of the cost of their medical care
a. reduces the quantity of health care they demand to zero b. has no effect on the amount of health care they consume, but does generate revenue for the government c. reduces their utilization of health care without compromising their health d. actually increases the amount of consumer surplus they receive e. amounts to a significant burden for most of those participants
The price of a pollution right is
a. determined by consumers b. determined by government c. a user charge d. determined by supply and demand e. a subsidy