Which of the following policies would most directly deal with free riding at a newly opened riverside park: charging each visitor, government funding from t...
Question 1 Report
Which of the following policies would most directly deal with free riding at a newly opened riverside park: charging each visitor, government funding from taxes, banning picnics or subsidising private gardens?
(a) Which policy is most appropriate? [1]
(b) State one characteristic of the park service that can create a free-rider problem. [1]
Answer Details
(a) Government funding from taxes is the most appropriate policy [1]. A park can be enjoyed by people who have not paid directly, so relying on voluntary payments may leave insufficient funding.
(b) The service is non-excludable [1]: people can enjoy the park without paying. This creates the free-rider problem because individuals may wait for others or the government to fund a service from which they still benefit. Non-rival consumption for many users is also acceptable.
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