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Scenario: Edward Has Inherited a House

Question 95

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Scenario: Edward has inherited a house. As the house is far away from where he lives currently, it has been vacant for the past few years. A housekeeper is paid regularly to look after the house and keep it clean. However, because Edward seldom visits the house, the housekeeper does not clean the house regularly.
-Refer to the scenario above.The housekeeper behaves in this particular way because of the presence of ________.


A) asymmetric information
B) a positive externality
C) the free-rider problem
D) a negative externality

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