Question

Market failure associated with public goods Deborah was willing to contribute $40 this year to her local college radio station. However, after learning that the radio station already had met its goal of raising $500,000, she decided not to contribute, because she knew she could listen to it without contributing. This is an example of:________. 1. An opportunity cost 2. A deadweight loss 3. A spillover cost 4. The free-rider problem

Answer 1

Answer:

4. The free-rider problem

Explanation:

Based on the information provided within the question it can be said that in this scenario this is an example of the free-rider problem. This is a problem that occurs in many markets where individuals who benefit from certain resources such as public gods or services, do not pay for them because they know they will benefit regardless. Which is exactly why Deborah decided not to contribute in this scenario.