Question

Jane loves driving her gas-guzzling, carbon-dioxide-emitting Rolls-Royce Phantom. She also would like to live in a world without climate change and she believes carbon dioxide in the atmosphere is causing climate change; thus, she believes she and the world would be better off if total carbon dioxide emissions are reduced. However, she knows that her own individual contribution, as large as it is, does not itself affect the climate and, besides, she would rather let others bear the burden of reducing overall carbon dioxide emissions. If others bear the burden, Jane reasons, she will enjoy a world without climate change AND still get to drive her Phantom. It’s a win-win for Jane! Which of the following statements are accurate about this story? (SELECT ALL THAT APPLY) 1. There is probably no collective action problem in this story. 2. A "public good" in this story is Jane’s Rolls-Royce Phantom. 3. Jane is a free-rider. 4. A "public good" in this story is "a world without climate change."

Answer 1

Statements 3 and 4 are accurate about the story

Step-by-step explanation:

1. By definition, a public good is a good that, once provided, no one in a group can be excluded from enjoying. Therefore, in the context of the story, public good is "a world without climate change", a good that everyone in the world can enjoy. So statement 4 is accurate.

Statement 2 is inaccurate because Jane's Rolls-Royce Phantom is at her disposal. Her car use will prevent others from using it.

2. Free riding is the act of enjoying the benefits of a public good without bearing part of the burden of providing it. In the story, Jane would rather let others bear the burden of reducing overall carbon dioxide emissions than doing it herself. In other words, she would like to enjoy a world without climate change (a public good) without contributing to make it. So Jane is a free-rider and statement 3 is accurate.

3. A collective action problem is a situation where free riding threatens to prevent a group from providing a public good. In this story, Jane's free riding action does not threaten to prevent people from providing "a world without climate change" because "she knows that her own individual contribution, as large as it is, does not itself affect the climate". However, if everyone behaves like Jane, then the world would be affected by climate change. So statement 1 is inaccurate.