Why is there a free-rider problem with public goods?
Please provide the best answer for the statement.
Most private goods and services are subject to the exclusion principle which is the idea that those who pay for the product are the ones who get it, but those who don’t pay for it are excluded from the benefits provided by that product.
The free-rider problem exists when it is not possible to exclude a person from the benefit of a good even if the person did not pay for its costs. Such is the case with a public good. Once a public good is provided, it is available to all people regardless of whether or not they pay for its cost.
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If a lender checks credit reports on individuals before mailing out loan offers, it is most likely trying to avoid
A) moral hazard. B) moral dilemma. C) adverse selection. D) adverse reaction.
How will nominal wages respond to a decrease in the price level in the short run?
What will be an ideal response?