If a good is subject to the free-rider problem and an inefficiently low level of production, the good must be a(n):
A)private good.
B)public good.
C)common resource.
D)artificially scarce good.

Question

Quizplus · Accepted Answer

Public goods are subject to the free-rider problem and may be produced inefficiently at an inefficiently low level, as there is no incentive for individuals to pay for and thus induce production of the good. Private goods, on the other hand, are excludable and rival in consumption, so individuals have an incentive to pay for them because they can be excluded if they do not. Common resources are rival in consumption but not excludable, so individuals may overuse them to the point of depletion. Artificially scarce goods are typically created through artificial means, such as patents or copyrights, and are not subject to the free-rider problem.

If a Good Is Subject to the Free-Rider Problem and an Inefficiently