Practicing Success
Free riding can occur if a good is _______ Which of the following options suits best in the above blank? |
A private good Excludable and non-rival Non excludable and non-rival Excludable and rival |
Non excludable and non-rival |
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. |