"Take a moment to thank the voluntary PBS fundraisers. The British Broadcasting Corporation (BBC) is funded by something called the "license fee," a tax of $245 per year on every household that has a television." (quote from The Federalist, August 7. 2014) Which of these two broadcasting companies has a free-rider problem? And why? PBS has a free rider problem because only people who pay taxes can watch it. BBC has a free-rider problem because only people who have TV can watch it. PBS has a free-rider problem because only viewers who choose to contribute toward the cost of its service actually pay, while others free ride. BBC has a free-rider problem because it is being funded by a compulsory fee that works like a tax.

"Take a moment to thank the voluntary PBS fundraisers. The British Broadcasting Corporation (BBC) is funded by something called the "license fee," a tax of $245 per year on every household that has a television." (quote from The Federalist, August 7. 2014) Which of these two broadcasting companies has a free-rider problem? And why? PBS has a free rider problem because only people who pay taxes can watch it. BBC has a free-rider problem because only people who have TV can watch it. PBS has a free-rider problem because only viewers who choose to contribute toward the cost of its service actually pay, while others free ride. BBC has a free-rider problem because it is being funded by a compulsory fee that works like a tax.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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