Question

g Carlos loves watching Downton Abbey on his local public TV station, but he never sends any money to support the station during its fundraising drives. Economists would call Carlos afree rider . True or False: The government can solve the problem caused by people like Carlos by taxing people who watch the show. True False True or False: The private market can solve this problem by making people watch commercials that are incorporated into the program. True

Answer 1

Answer:

1. True
2. False
3. True

Explanation:

Carlos is indeed a free rider as he is watching the show without incurring any costs for doing so. He is therefore benefitting from the show without paying adequately for it.

The Government cannot solve the problem by taxing everyone who watches the show because some might not be free riders and instead they would be paying more. The Government can solve it in other ways however such as by privatizing the station.

Private companies can indeed solve this problem by making people watch the commercials because the companies that pay for the commercials would then pick up the cost for Carlos.