Multiple Choice
Which of the following is the best example of the tragedy of the commons?
25
views
8. The Types of Goods
The Free Rider Problem and the Tragedy of the Commons
Struggling with Microeconomics?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
A free rider is which of the following?
A
A consumer who is excluded from using a public good
B
A producer who supplies goods at a loss
C
An individual who benefits from a good or service without paying for it
D
An individual who pays more than the market price for a public good
Verified step by step guidance1
Understand the concept of a 'free rider' in microeconomics: it refers to an individual who benefits from a good or service without contributing to its cost.
Recall that public goods are non-excludable and non-rivalrous, meaning people cannot be easily excluded from using them and one person's use does not reduce availability to others.
Recognize that because of these characteristics, some individuals may consume the good without paying, which is the essence of the free rider problem.
Evaluate each option by comparing it to the definition: a free rider is not someone excluded from the good, nor a producer supplying at a loss, nor someone paying more than market price.
Conclude that the correct description of a free rider is 'an individual who benefits from a good or service without paying for it.'
Related Videos
Related Practice
The Free Rider Problem and the Tragedy of the Commons practice set
Problem sets built by lead tutorsExpert video explanations