Which of the following statements is correct?
A)Environmental degradation is an example of a free rider problem..
B)The division between public goods and common resources is clear-cut.
C)Some goods, such as lighthouses, may be either private or public goods.
D)The free-rider problem prevents governments from supplying public goods.

Question

Quizplus · Accepted Answer

Lighthouses are often cited as an example of a public good, as they provide benefits to many people who may not directly pay for them. However, lighthouses can also be privately owned and operated, in which case they would not be considered a public good. Therefore, it is correct that lighthouses may be either private or public goods. Option A is incorrect because environmental degradation is not an example of a free rider problem, but rather a consequence of the tragedy of the commons. Option B is incorrect because there can be overlap between public goods and common resources, and the division is not always clear-cut. Option D is incorrect because while the free-rider problem can make it difficult for governments to provide public goods, it does not prevent them from doing so entirely.

Which of the Following Statements Is Correct