Another econ problem....?

Question

Which of the following scenarios demonstrates the concept of free-riding?

A. The local church offers free meals during a national holiday.

B. Everyone can listen to public radio, whether they have given a donation or not.

C. A school fundraiser raffles off a free trip to Hawaii. Many people purchase raffle tickets, but there is only one winner.

D. A toll bridge in New Jersey requires that every car crossing the bridge pay a toll.

Answer 1

First, let us understand what is free rider problem we learn in welfare economics.

Free rider problem arises when rational individuals consume certain public good with or without contributing sufficiently to it.

From the definition, clearly, when applied to the above question, the answer is B. The keyword here is 'public good' and 'with or without contributing sufficiently', which apparently implies the answer B. Hope that answers your question :)

A and C are not public goods, therefore doesn't fit into the definition, D is a public good, but it does not satisfy the 'with or without contributing sufficiently' description.

Answer 2

"C" is closest right answer. Next would go "B" but it's more public service than commercial as in "A" case.

Answer 3

B. free rider is you drink the water at the cooller in the office that everyone else gives a donation for because you don't have to pay for it and no ones has to told you to go buy you some