Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Government Budget and Economy

Question:

Free riding can occur if a good is  _______

Which of the following options suits best in the above blank?

Options:

A private good

Excludable and non-rival

Non excludable and non-rival

Excludable and rival

Correct Answer:

Non excludable and non-rival

Explanation:

The correct answer is Option 3:Non excludable and non-rival

'Free riding can occur if a good is non-excludable and non-rival.

When a good is non-excludable, it means that individuals cannot be effectively excluded from using the good. When it is non-rival, it means that one individual's use of the good does not reduce its availability to others. These characteristics lead to the free-rider problem, where individuals can benefit from the good without contributing to its cost, because they cannot be excluded from its use.