Question

Once it becomes obvious that a common resource is being overused,
A. market forces cause the use of the resource to shift to a sustainable level.
B. it continues to be overused because individuals usually have no incentive to reduce their use of the good.
C. society voluntarily limits its use of the good in nearly all cases because a person nearly always opts to foster and support community interest instead of individual self-interest.
D. the good becomes a club good (natural monopoly good).
E. A and C, only

14. The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource. As a result,
(x) externality could be eliminated if all of the sheep owners received a subsidy payment from government.
(y) the town could auction off a limited number of sheep-grazing permits to correct this problem.
(z) the town could assign land property rights to individual owners to correct this problem.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (y) only

15. Which of the following statements is (are) correct?
(x) If general knowledge is not excludable then it is quite likely that profit maximizing firms in private markets would choose to not supply general knowledge to society.
(y) As with many public goods, determining the appropriate level of government support for the production of general knowledge is difficult because benefits are hard to measure
(z) If technological knowledge is excludable and general knowledge is not excludable, then it is likely that technological knowledge is a “club good” (natural monopoly good) and general knowledge is a public good
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (z) only

Answer 1

Hi! Welcome to Chegg!

Due to presence of Chegg policy, I am answering one question.

Q. Once it becomes obvious that a common resource is being overused,

Ans: B

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