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Free Rider
A free rider is an individual who benefits from the contributions that others make toward a cooperative project or public good without contributing to the costs themselves.
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Social Science
Empirical Science
Science
CORE Econ
Economy
Economics
Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
Ch.10 Market successes and failures: The societal effects of private decisions - The Economy 2.0 Microeconomics @ CORE Econ
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Example of an Environmental Public Good: A Sunset View
Radio Broadcasting as a Public Good
A city builds a new lighthouse on its coast. The light from the lighthouse helps all ships in the area navigate safely, regardless of how many ships are present. The city funded the construction through taxes, and it is impossible to charge individual ships for using the light as they pass. Which aspect of this situation best demonstrates the defining characteristic of a public good?
A key characteristic used to classify economic goods is 'rivalry'—the extent to which one person's use of a good diminishes its availability for others. A good is considered 'non-rival' if one person's consumption does not reduce the amount available for someone else. Which of the following scenarios describes a good that is best characterized as non-rival?
Community Project Funding Dilemma
A good can be classified based on two key characteristics: whether its consumption by one person prevents another from consuming it (rivalry), and whether it is possible to prevent people who have not paid for it from having access to it (excludability). Match each type of good with its correct description based on these characteristics.
The Market Provision of Public Goods
A group of residents in a neighborhood proposes hiring a private security firm to patrol their streets at night. The presence of the patrol would increase safety for all residents, making the entire area safer. The plan is to fund this service through voluntary monthly contributions. Based on the economic characteristics of this service, what is the most likely challenge this plan will face?
A lighthouse on a rocky coastline guides ships safely to a harbor. Its light is visible to any vessel in the area. Considering the economic characteristics of the lighthouse's service, which statement provides the most accurate analysis?
Classifying a Digital Service
Community Park Maintenance
A good is defined by two key characteristics: the degree to which one person's use diminishes its availability for others (rivalry), and the ability to prevent people from using it (excludability). Which of the following scenarios best describes a good that is both non-rival and non-excludable?
A public highway during a severe traffic jam, where each additional car slows down all other cars, still functions as a public good because it is open to everyone.
Evaluating a Policy for Improving Air Quality
A company develops a new, highly effective mosquito repellent formula and sprays it over a large public park. The spray eliminates all mosquitoes in the area for a week, and anyone visiting the park benefits from the mosquito-free environment. The company cannot charge individual park visitors for this benefit. However, the pleasant, mosquito-free air in the park does not extend to the surrounding neighborhoods. Which statement best analyzes this situation in the context of a public good?
A national radio station incurs a total cost of $50,000 to produce and transmit a specific one-hour program. Once the program is broadcast, its signal is available to anyone with a radio receiver in the broadcast area. From an economic perspective, what is the cost of allowing one more person within this area to listen to the program?
Analyze the characteristics of each item listed below and match it to the correct economic classification based on its properties of rivalry (whether one person's use prevents another's) and excludability (whether people can be prevented from using it).
Analysis of National Defense as a Public Good
Voluntary Contribution for a Shared Resource
A software company invests $2 million to develop a new weather-tracking application. Once the development is complete, the application is made available for anyone to download for free. The cost to the company for one additional person to download and use the app is virtually zero. Based on this information, which statement best analyzes the economic nature of this application?
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Learn After
Neighborhood Streetlight Funding
A small coastal town relies on its lighthouse to guide ships safely to shore. The lighthouse is funded entirely by voluntary donations from local shipping companies. One shipping company, which frequently uses the port, decides not to donate, knowing that the lighthouse will still operate using the funds from other companies and their ships will still benefit from its light. The behavior of the non-donating company is a classic example of which of the following?
Group Project Contribution
Evaluating a Solution to a Collective Action Problem
A neighborhood association proposes building a new public park, funded entirely by voluntary donations from residents. The park, once built, will be open for everyone to enjoy, regardless of whether they donated. Which of the following best explains the primary economic reason why this funding method is likely to result in the park being underfunded?
In an economic interaction between a landowner and a landless farmer, a new legal system is introduced. This system prohibits the use of force, meaning the farmer cannot be compelled to work. It also recognizes the landowner's exclusive right to the land and enforces any voluntary contracts made between the two parties. Which statement best analyzes the dual role of this legal framework on their relationship?
A person who watches a pay-per-view sporting event by looking through a neighbor's window without their knowledge is acting as a free rider.
A public radio station is funded entirely by listener donations. The broadcast is available to anyone with a radio, regardless of whether they contribute. A significant number of regular listeners do not donate, yet they continue to enjoy the programming. Which characteristic of the radio broadcast is the primary reason the station cannot easily solve this funding problem?
Four roommates share an apartment and agree to split the cost of a high-speed internet connection. The service, once active, is accessible via a shared password. One roommate refuses to pay their share but continues to use the connection. The other three roommates complain but do not change the password because it is inconvenient to coordinate a new one. Which statement provides the most accurate economic analysis of this situation?
A city government builds a new public fireworks display, funded entirely by a 1% sales tax increase on all goods sold within the city. The display can be seen from anywhere in the city. Which of the following statements provides the most accurate economic analysis of this situation?