The Economic Way of Thinking 13th Edition by David Prychitko, Peter Boettke, Paul Heyne

Exercise 19

Economist Russ Roberts has been known to say, "If you're paying, I'll have the top sirloin." Roberts used a familiar example to capture neatly the essence of the free-rider dilemma as it applies to congressional spending.
(a) Suppose that you regularly turn down dessert and an extra drink when you're having lunch alone, because these two items would add $4 to the cost of your $6 lunch, and they aren't worth that much to you. But now suppose you're having lunch with three friends, and you have all agreed to split the bill evenly. What will dessert and an extra drink cost you in the second case? Why might you decide in the second case to enjoy dessert and that extra drink?
(b) Suppose you restrain yourself when ordering even though you know the bill will be split evenly because you don't want to take advantage of your friends. How effective would that restraint be on your ordering if you were going to split the bill evenly with all 100 people eating in the restaurant? What would be the monetary cost to you in this case of ordering the dessert and extra drink?
(c) If you thoroughly enjoy steak and lobster, by far the most expensive item on the menu, would you be much less inclined to order it if you were paying your own bill than if you were splitting evenly the total bill of all 100 people in the restaurant?
(d) Use Russell Roberts's analogy to explain why Congress so often appropriates money for local projects whose expected benefits, measured in monetary terms, fall far short of their expected monetary costs.