Question

A situation in which an individual or firm can reap all of the benefits of a...

A situation in which an individual or firm can reap all of the benefits of a product or service without having to pay a share of the costs is known as

  • A. a free-rider problem.
  • B. a zero-sum game.
  • C. the nondiscrimination principle.
  • D. the multiplier effect.
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Answer #1

Option A is correct

Zero sum game is a concept in game theory in which gains or losses by one individual are balanced exactly by the gains and losses by other individual so that the net sum is zero. Multiplier effect is used in macroeconomics where changes in one variable bring greater changes in other variables. It is not nondiscrimination principle either. it is called free riding problem because in free riding an individual attempts to ride free on the efforts by the other and it does not feel to pay for it..

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