An American who agreed with the cartoon illustrating the free-rider problem in public goods would most disagree with which of the following statements?

• A. The free-rider problem can lead to under-provision of public goods.
• B. Individuals may benefit from public goods even if they do not pay for them.
• C. Public goods should be provided solely by private markets without government intervention.
• D. Government funding is often necessary to ensure optimal provision of public goods.

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the free-rider problem in the context of public goods. Public goods are characterized by non-excludability and non-rivalry, meaning individuals cannot be excluded from using them and one person's use does not reduce availability to others.
2. Step 2: Recognize that the free-rider problem occurs when individuals benefit from a public good without contributing to its cost, leading to under-provision because private markets may not find it profitable to supply these goods adequately.
3. Step 3: Analyze each statement in the problem to see which aligns or conflicts with the free-rider problem concept. Statements acknowledging under-provision, benefits without payment, and the need for government funding are consistent with the free-rider problem.
4. Step 4: Identify the statement that contradicts the free-rider problem: the idea that public goods should be provided solely by private markets without government intervention ignores the free-rider issue and the typical market failure associated with public goods.
5. Step 5: Conclude that the statement advocating exclusive private market provision is the one an American agreeing with the free-rider problem would most disagree with, because it overlooks the necessity of government involvement to address the market failure.