Question: Why does the free-rider problem make it difficult or impossible for markets to provide public goods efficiently?

Why does the free-rider problem make it difficult or impossible for markets to provide public goods efficiently?

Step by Step Solution

★★★★★

3.46 Rating (166 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

It is difficult to provide public goods efficiently when free riders exist ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

846-B-E-D-S (2540).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

Q:

What is the free-rider problem? Why does the free-rider problem induce the government to provide public goods? How should the government decide whether to provide a public good?

Q:

Why may it be difficult or impossible for a governmental unit to determine the total cost of performing a particular activity or function?

Q:

SFAC No. 6 defines circumstances as follows: Circumstances are a condition or set of conditions that develop from an event or series of events, which may occur almost imperceptibly and may converge...

Q:

Why does the free-rider problem make it difficult or impossible for markets to provide public goods efficiently?

Q:

10. Why does the free-rider problem make it difficult or impossible for markets to provide public goods efficiently?

Q:

1. ] a. Explain what an equitable allocation is and why an optimal allocation may be unequal. (40%) b. Explain the conditions for exchange efficiency, production efficiency and production mix...

Q:

Which of the following represents the true economic cost of production when firms produce goods that cause negative externalities? Group of answer choices the social cost of production the explicit...

Q:

In a market economy, goods are typically allocated based on willingness to pay. However, with public goods, individuals may play down their true valuation to avoid paying. This leads to less...

Q:

The Coase theorem states that when externalities are present, under certain conditions a) private parties can achieve the efficient outcome if there is government intervention b) private parties can...

Q:

Social services primarily consist of Select one: a.welfare programs for low-income people. b.a government health plan for the poor. c.pensions collected for the infirm. d.the same services as Old Age...

Q:

A business provides its employees with varying amounts of vacation per year, depending on the length of employment. The estimated amount of the current years vacation pay is $375,000. Illustrate the...

Q:

For the following scores, find the value of each expression: a. 0

Q:

21. An individual can build up his/her capital . ( LO2 ) a) by working longer hours only b) by cutting back on consumption only c) by both cutting back on consumption and working longer hours d) only...

Q:

During the planning phase of your project, your team decided to procure a certain brand of hardware because it had the lowest price and came with free shipping and installation. This approach saved...

Q:

A miracle drug that cures obesity is developed and produced competitively at a constant cost to producers of 10 cents per dose. The companies that produce the drug, however, discharge chemical wastes...

Q:

Suppose that in the preceding problem drug producers invent another production process that discharges no waste and can be used at a constant cost of 10.6 cents per dose. a. What will the price and...

Q:

Distinguish between efficiency in production and efficiency in output. Can an industry achieve efficiency in production and still produce at an inefficient output level? Explain.

Q:

1. The basic WACC equation The cakulation of WACC involves calculating the weighted average of the required rates of return on debt, preferred stock, and common equity, where the weights equal the...

Q:

hey.. can I you help me with this exercise Zabagawa Inc. is thinking about marketing a new software product. Upfront costs to market and develop the product are $5 million. The product is expected to...

Q:

You can earn 0.35 percent per month at your bank. Required: If you deposit $1,800, how long must you wait until your account has grown to $3,500? (Enter rounded answer as directed, but do not use the...