0 Give an example of a free rider What is the solution to th

0. Give an example of a free rider. What is the solution to the problem of free riders 31. Explain a carbon tax and a cap-and-trade system. What are the pros and cons of each method of carbon pricing? 32. Use an example to explain how an efficient market may be a market with less equity. 33. What is the process of creative destruction? Explain using examples. 34. What happens if we regulate \"price gouging\" to keep the price of emergency supplies from rising during a disaster? 35. What is the purpose of price discrimination? Describe examples. What does this have to do with elasticity?

Solution

Ans: 30

Free Rider problem:

Free Rider problem in economy refers to situation of market failure cause by individual when they use the public goods for their benefit without paying for their fair share in taxes. It situation when a person uses the public goods effectively but won’t willing to pay for that used service.

Example:

When a person does fishing from a public pond and sells those fishes for personal benefit but wont willing to pay for that free fishing to government it’s called free rider problem.

Solution:

When a person or entity uses the public resource or public goods more often than other person who uses lesser, that service should be taxed for more often use for person or entity.