Which of the following is an example of the free-rider problem? A People who do not buy pizza because they are allergic to cheese B People who overspend on a vacation C People who benefit from listening to public radio but never donate to keep it running D People who choose not to give to charitable causes because they do not agree with the organization’s goal

Which of the following is an example of the free-rider problem? A People who do not buy pizza because they are allergic to cheese B People who overspend on a vacation C People who benefit from listening to public radio but never donate to keep it running D People who choose not to give to charitable causes because they do not agree with the organization’s goal

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter2: The One Lesson Of Business

Section: Chapter Questions

Problem 2.3IP

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Imagine that a town of 200 people is trying to decide whether to pay for mosquito control. The town has surveyed their citizens and they each say they value mosquito control at $75. Mosquito control only costs $2,500 so the town goes ahead and pays for the service. When the town asks for donations to pay for the mosquito control, they only receive $1,000. What does this result show? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a The town's citizens were free riders. b The mosquito control suffered from the tragedy of commons. The mosquito control cost must have been greater than its economic benefit. d. The town's survey must have overestimated the value of mosquito control.
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