Multiple Choice
Which scenario is the best example 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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Who among the following is considered a free rider?
A
A government official who regulates the use of common resources
B
A person who benefits from a public good without paying for it
C
A consumer who pays for every good and service they use
D
A producer who supplies goods in a perfectly competitive market
Verified step by step guidance1
Step 1: Understand the concept of a 'free rider' in microeconomics. A free rider is someone who benefits from a good or service without paying for it, typically in the context of public goods.
Step 2: Identify the characteristics of public goods: they are non-excludable (people cannot be prevented from using them) and non-rivalrous (one person's use does not reduce availability to others).
Step 3: Analyze each option to see who benefits without paying. A government official regulating resources is not a free rider because they do not consume the good without payment; they perform a role.
Step 4: A consumer who pays for every good and service they use is clearly not a free rider because they contribute payment for their consumption.
Step 5: A producer supplying goods in a perfectly competitive market is not a free rider because they are actively providing goods and typically receive payment. Therefore, the free rider is the person who benefits from a public good without paying for it.
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The Free Rider Problem and the Tragedy of the Commons practice set
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