Which of the following is a consequence of free riders?Multiple ChoiceThe good or service is unlikely to be produced because not enough people paid to use it.The good or service is produced regardless.The government always steps in to produce the good or service.Consumers are better off by not having the good or service be produc
Question
Which of the following is a consequence of free riders?Multiple ChoiceThe good or service is unlikely to be produced because not enough people paid to use it.The good or service is produced regardless.The government always steps in to produce the good or service.Consumers are better off by not having the good or service be produc
Solution
The consequence of free riders is that the good or service is unlikely to be produced because not enough people paid to use it.
Here's why:
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A free rider is a person who benefits from something without expending effort or paying for it. In the context of goods or services, this typically refers to public goods, which are non-excludable (everyone can use them) and non-rivalrous (one person's use doesn't diminish another's).
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If too many people decide to be free riders, then not enough people are paying for the production of the good or service.
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Without sufficient funding, it becomes economically unfeasible to produce the good or service.
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Therefore, the good or service is unlikely to be produced.
The other options are less likely. The good or service may not be produced regardless of free riders (option B). The government doesn't always step in to produce the good or service (option C). And consumers may not necessarily be better off without the good or service (option D).
Similar Questions
When a free-rider problem exists,Group of answer choicesthe market will devote too few resources to the production of the good.the cost of the good will always be more than the benefit of the good.the good will not be produced.entrepreneurs will eventually find a way to make free-riders pay their share.
Which of the following is the best example of the free-rider problem? aA company gives away free samples of a new product. bA single firm is the sole supplier of corn oil. cThere are economies of scale in the production of passenger elevators. dIt is difficult to exclude those who do not pay for a good from enjoying the benefits of the good.
Multiple Choice QuestionThe existence of a good or service that no one wants to buy will have which of following effects on the resources used to produce it?Multiple choice question.There will be no surplus for the resources used.There will be no supply for the resources used.There will be no demand for the resources used.There will be no shortage for the resources used.
As it relates to a public good, non excludability means that:Multiple Choicefree riders cannot be barred from receiving the benefits.there is no need or demand for the good.either the public sector or the public sector can produce the good, but not both.one person's benefit from the good does not reduce the benefit available to others.
Which of the following is true when the production of a good results in negative externalities? aThe government must produce the good. bThe private market will produce too little of the good. cThe private market price will be too low. dThe government must prevent the production of the good.
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