What is a key characteristic of free-riders?

Prepare for the Rutgers Introduction to Microeconomics Test. Study with comprehensive multiple-choice questions and detailed explanations. Master key economic concepts and excel in your exam!

Free-riders are individuals or entities that benefit from a resource or service without contributing to the cost of providing that resource or service. This situation commonly occurs with public goods, which are non-excludable and non-rivalrous, meaning that once they are provided, it is difficult or impossible to prevent anyone from using them, and one person's use does not diminish the availability for others.

For instance, consider a public park. Everyone can enjoy the benefits of the park, but not everyone necessarily contributes to its maintenance or upkeep through taxes or donations. This leads to a scenario where some individuals take advantage of the park's presence without sharing the financial burden of maintaining it. This characteristic of free-riders can lead to underfunding of public goods, as they rely on others to shoulder the costs while they enjoy the benefits.

The other characteristics do not align with the definition of free-riders. Paying for consumption or contributing to public goods indicates an active role in financing, while being characterized by high income does not inherently relate to the concept of free-riding.

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