Question

The free-rider problem; A. Arise from the ability to exclude an individual from the benefits of someone else's purchase B. Is a government failure resulting from consumption of private goods. C. Reflects the inability to exclude an Individual from the benefits of someone else's purchase. D. Means that the market mechanism is the most efficlent way to produce public goods.

Answer 1

Answer: C. Reflects the inability to exclude an Individual from the benefits of someone else's purchase.

Explanation:

The Free-rider problem is a concept in economics that describes the fact that sometimes people benefit from goods and services that they wither did not pay for or underpaid for.

There has been a failure to exclude those individuals who are free-riding from the benefits of goods and services that other people are paying for. A simple example of the free-rider phenomenon is using Wikipedia. Most of those who use it do not contribute or pay for its upkeep in any way yet reap the benefits of its extensive information.