Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 5: Problem 2

What is free riding? How is free riding related to the need for public goods?

Short Answer

Expert verified
Free riding is a situation where people benefit from public goods without contributing to their costs. It is related to public goods in that it can result in the underprovision of such goods due to insufficient funds, as free riders are not contributing towards these costs.

Step by step solution

01

Understanding Free Riding

Free riding occurs when people take advantage of a public good without contributing to its cost. The concept is named as such because these individuals or groups ’ride’ off the expense and effort of others, without making their own contribution.
02

Understanding Public Goods

Public goods refer to commodities or services that are provided without profit for all society members. Examples of public goods include clean air, street lighting, and public parks. These goods are usually funded by taxes and are available for everyone to use, regardless of their contribution to taxes.
03

Connection between Free Riding and Public Goods

Free riding is closely connected to public goods as individuals or groups can benefit from those goods without contributing to them. While this situation can be unavoidable due to the nature of public goods, excessive free riding can lead to the under-provision of these goods because the cost falls solely on the part of the population that contributes towards them. This can result in issues such as insufficient funds to maintain or improve these goods.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

In writing about the increased popularity of national parks in the United States, such as Yosemite, Yellowstone, and the Grand Canyon, environmental economist Margaret Walls wrote: When one person's visit to a park doesn't appreciably diminish the experience for others, the fee to use the park should be zero. That doesn't apply when the public good starts to experience congestion problems ... the Park Service should ... [charge] a significantly higher fee at the most popular parks during the summer months. Are Yosemite and other national parks public goods? Briefly explain. Source: Margaret A. Walls, "Protecting Our National Parks: Entrance Fees Can Help," Resources, No. \(193,\) Fall \(2016 .\)

When does the private cost of producing a good differ from the social cost? Give an example. When does the private benefit from consuming a good differ from the social benefit? Give an example.

As readers of Herman Melville's 1851 novel Moby Dick know, at one time oil made from whale blubber was an important source of energy that was widely used by households and firms in oil lamps. Other sources of energy replaced whale oil in the second half of the nineteenth century, and today many Americans consider whales only as a source of entertainment on visits to aquariums and whale watching excursions. But some species of whales-including baleen and gray whales-are in danger of extinction. The U.S. Department of Agriculture estimates that more than 9 billion chickens are raised for food annually. Chickens, unlike whales, are not threatened with extinction. Briefly explain why.

Why do most economists prefer tradable emission allowances to the command-and- control approach to pollution?

A column in the New York Times has the headline "Should We Tax People for Being Annoying?" a. Do annoying people cause a negative externality? Should they be taxed? Do crying babies on a bus or plane cause a negative externality? Should the babies (or their parents) be taxed? b. Do people who plant flowers and otherwise have beautiful gardens visible from the street cause a positive externality? Should these people receive a government subsidy? c. Should every negative externality be taxed? Should every positive externality be subsidized? How might the government decide whether using Pigovian taxes and subsidies is appropriate?
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free