Multiple Choice
Which of the following best illustrates the concept of the tragedy of the commons?
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8. The Types of Goods
The Free Rider Problem and the Tragedy of the Commons
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Which type of group typically has to deal with the problem of free riders?
A
Private clubs with restricted membership
B
Monopolistic firms
C
Groups providing public goods
D
Competitive markets for private goods
Verified step by step guidance1
Understand the concept of a free rider: A free rider is someone who benefits from a good or service without paying for it, which often leads to under-provision of that good or service.
Identify the characteristics of public goods: Public goods are non-excludable (people cannot be prevented from using them) and non-rivalrous (one person's use does not reduce availability to others).
Recognize why free riders are a problem for groups providing public goods: Since people cannot be excluded from using public goods, individuals may choose not to contribute to their provision, expecting others to pay instead.
Contrast this with private clubs with restricted membership: These clubs can exclude non-members, so free riding is less of an issue because only paying members can benefit.
Conclude that groups providing public goods typically face the free rider problem due to the non-excludable nature of the goods they provide.
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