Final answer:
The free rider problem poses challenges to sharing the costs of public goods, as individuals have an incentive to let others pay for the goods and benefit without contributing themselves. Governments often address this problem through mechanisms like taxes and laws to ensure everyone contributes.
Step-by-step explanation:
The problem of sharing the costs of public goods brings up several challenges, the most prominent of which is the free rider problem. The free rider problem occurs when individuals have an incentive to let others pay for a public good and then benefit from it without contributing themselves. This undermines the collective provision of public goods and can result in less than the socially optimal amount of the good being produced.
For example, let's consider a public good like a local fire department. If Rachel and Samuel contribute to the fire department, their personal cost is $4, but the social benefit is $6. However, they may choose not to contribute because they know that others will cover most of the costs, allowing them to still use the fire department without paying.
To address the free rider problem, governments often play a role in providing and paying for public goods. They can use mechanisms like taxes and laws to require everyone to contribute, thereby ensuring the provision of public goods.