Which of the following is an example of the free-rider problem? a. Both Zoe and

Question

Which of the following is an example of the free-rider problem? a. Both Zoe and Zach receive low-cost dental care at the local dental school, so neither of them pays the full cost of the care. b. Alfred receives a free lunch from the local "Meals on Wheels" program because of his low monthly income. Yet his next door neighbor, Alice, is not eligible for the free lunch. c. Bruce owns Buster, a large dog who barks whenever anyone walks near his house. Betty lives next to Bruce, and Buster's barking can be heard whenever anyone walks near her house, too. Thus, Betty receives free protection from burglars because of Buster's barking. d. Sam purchases a burger at a fast food restaurant and gets a second burger free because the restaurant is having a buy one. get one free sale.

Explanation / Answer

Correct option: (C)

Reason: Free riding problem occurs when one party benefits without having to pay for the transaction themselves, and rather the other party pays for it.

In the given case, the neighbor is getting benefit from burglars without having to pay for the security or dog.

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