ECONOMICS
MARKET FAILURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Licenses to emit quantities of pollutants that can be bought and sold by polluters.
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The property of a good whereby a person can be prevented from using it.
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The property of a good whereby one person’s use diminishes other people’s use.
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A person who receives the benefit of a good but avoids paying for it.
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Detailed explanation-1: -A free rider is someone who wants others to pay for a public good but plans to use the good themselves; if many people act as free riders, the public good may never be provided. Markets often have a difficult time producing public goods because free riders attempt to use the public good without paying for it.
Detailed explanation-2: -free rider. noun [ C ] disapproving. a person or company that gets an advantage without paying for it or earning it: Free riders are those workers who benefit from the existence of labor unions, but who don’t belong to a union.
Detailed explanation-3: -Whenever you enjoy something that seems free, such as a day at a clean beach, someone pays for its upkeep, which technically makes you a free rider. The free rider problem describes what happens when many people enjoy a seemingly free resource without paying for it.
Detailed explanation-4: -The free rider problem is an issue in economics. It is considered an example of a market failure. That is, it is an inefficient distribution of goods or services that occurs when some individuals are allowed to consume more than their fair share of the shared resource or pay less than their fair share of the costs.
Detailed explanation-5: -In economics, a free rider is someone who takes advantage of the work of others without ever having to pay the costs.