Question

question 1 (multiple choice worth 4 points)
(lc)
which term describes the individual use of products that can lead to externalities?
free resources
free riders
common goods
private consumption

Explanation:

• Free resources: These are resources that are not owned by anyone and are available at no cost. Their use doesn't directly relate to the concept of externalities caused by individual product use.
• Free riders: Free - riders are people who benefit from a good or service without paying for it. This is more about non - payment rather than the individual use of products causing externalities.
• Common goods: Common goods are non - excludable (it's hard to stop people from using them) but rivalrous (one person's use reduces availability for others). When individuals use common goods, their actions can have external effects. For example, over - fishing in a common fishing ground (a common good) by one fisherman reduces the fish stock for others (a negative externality).
• Private consumption: Private consumption is about an individual consuming a privately - owned good. While it can have some externalities (e.g., a person smoking a private cigarette and affecting others' health), the term "common goods" is more directly associated with the idea of individual use leading to externalities due to their non - excludable and rivalrous nature.

Answer:

Common goods