In the context of public goods, the free-rider problem leads to: MCQ with Answer and Explanation

In the context of public goods, the free-rider problem leads to:
A. No role for government
B. Under-provision of public goods by the market
C. Efficient provision by private firms
D. Over-provision of public goods by the market
Answer: Option B
Solution (By JKSSB Mock Tests)
Because individuals can enjoy the benefits of a pure public good without paying, they have an incentive to free-ride, resulting in under-provision if left to the private market.

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Practice More Economy Set 1 Questions

Question #1
The 'Finance Secretary' in India is under the:
A. Ministry of Finance
B. RBI
C. NITI Aayog
D. Ministry of Commerce

Correct Answer: Option A


Explanation:
Finance Secretary is the administrative head of the Ministry of Finance.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'ICRA' in India is a:
A. insurance company
B. stock exchange
C. credit rating agency
D. bank

Correct Answer: Option C


Explanation:
ICRA is a credit rating agency.

This question belongs to: Economy GK Economy Set 1
Question #3
The 'Goods and Services Tax' Composition Scheme is designed to:
A. reduce compliance burden for small taxpayers
B. eliminate input tax credit for large taxpayers
C. increase compliance burden
D. increase tax rates

Correct Answer: Option A


Explanation:
Composition scheme reduces compliance burden for small taxpayers.

This question belongs to: Economy GK Economy Set 1