What is a significant issue associated with public goods?

Public goods are defined by two main characteristics: they are non-excludable and non-rivalrous. This means that once they are available, individuals cannot be excluded from using them, and one person's use does not diminish their availability to others. The free rider problem arises directly from this nature of public goods. Individuals may benefit from the good without contributing to its cost, leading to underfunding and potential shortages since people can enjoy the benefits without paying for them. This creates an issue where there is insufficient incentive for private entities to produce these goods, because they cannot easily charge for their use.

On the other hand, the other options identify problems, but they do not capture the specific essence of public goods the way the free rider problem does. Concerns over limited supply leading to competition relate more to private goods. The high costs and issues of exclusive access pertain to the challenges of provision and payment structures, which are not the defining traits of public goods. Thus, the free rider problem is a central and significant issue associated with public goods, directly impacting their provision and sustainability in the economy.