contestada

Which of the following best illustrates the free rider problem?A. Since no one owns elephants and elephants are valued for their hide, meat and ivory, elephants can be hunted to extinction.B. For every purchase of a $30 fare card, you are entitled to five free bus rides.C. If your neighbors professionally landscape their front yards, it is likely that the market value of your property will increase.D. All three homeowners in a quiet cul-de-sac have expressed the desirability of security lighting in the common parking area. One of the homeowners installs the lighting and asks you to contribute toward the cost. You choose not to contribute.

Respuesta :

Answer: Option (D) is correct.

Explanation:

The free rider problem arises when the burden of a shared product transfer on one person, since both are enjoying the utilities derived from that product.  

Other person refuses to pay for the shared product's burden and having a free ride.

In this question, there are three home owners and all of them are interested for fixing a security lighting in the parking lot.

Since, one of the homeowners installed that lights and asked others to pay for the product as they are also getting utilities from the security lightning.

But they refuses to contribute towards cost of security lightning in the parking lot. Hence, they are free riders.  

Otras preguntas