Which of the following types of goods is subject to the free-rider problem?
A) a private good
B) a public good
C) a product that creates a positive externality
D) a product that creates a negative externality

Question

Quizplus · Accepted Answer

A public good is subject to the free-rider problem because individuals can benefit from its provision without contributing to its production, effectively "free-riding" on the efforts of others. Private goods, on the other hand, are usually subject to exclusion and can only be consumed by those who pay for them. Products that create externalities are not necessarily subject to free-riding, although they may require government intervention to ensure that the costs or benefits of their production are fully accounted for.

Which of the Following Types of Goods Is Subject to the Free-Rider