Question

A fireworks show has been arranged in a park. The ticket for the show is $5 but only 40% of the tickets get sold as spectators can watch the show without entering the park. This is an example of ________.

1. the tragedy of the commons
2. the paradox of thrift
3. the free-rider problem
4. the paradox of plenty

Answer 1

Answer:

The correct option is 3

Explanation:

As the show is arranged in a park where the spectators can watch the show without entering the park and because of that only 40% ticket is sold. This is a example of free rider problem or can be consider as a example of market failure. It is a term where an individual or person who benefited from something without paying for it or expending the effort.