Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 13: Q.15 (page 316)

What is the free rider problem?

Short Answer

Expert verified

Free riders are those who want other people to fund a public good and then intend to use it themselves.

Step by step solution

01

Content Introduction

Some people become free-riders because public products are nonexcludable and non-rival.

02

Content Explanation

When consumers make purchasing decisions, a paradox might arise in which customers have incentives to let others pay for the public good and then "free ride" on everyone else's spending since once a public good is supplied, it is accessible to all. Providing a certain public good will not be efficient if numerous people act as free riders.

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

Is it inevitable that government must become

involved in supporting investments in new technology?

Name two public goods and explain why they are public goods.

Can a company be guaranteed all of the social

benefits of a new invention? Why or why not?

Do market demand curves reflect positive externalities? Why or why not?

Education provides both private benefits to those who receive it and broader social benefits for the economy as a whole. Think about the types of policies a government can follow to address the issue of positive spillovers in technology and then suggest a parallel set of policies that governments could follow for addressing positive externalities in education.
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