ECONOMICS
MARKET FAILURES
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Goods that are rival in consumption but not excludable.
|
|
|
A parable that illustrates why common resources are used more than is desirable from the standpoint of society as a whole.
|
|
|
Either A or B
|
|
|
None of the above
|
Detailed explanation-1: -The tragedy of the commons refers to a situation in which individuals with access to a public resource (also called a common) act in their own interest and, in doing so, ultimately deplete the resource. This economic theory was first conceptualized in 1833 by British writer William Forster Lloyd.
Detailed explanation-2: -The Tragedy of the Commons is an economic concept about the use of a Common Pool of Resources. Each individual has an economic incentive to gain by consuming common pool resources. Since the common resource pool is large and individual has no economic incentive to limit their own use.
Detailed explanation-3: -Depletion of natural resources: When common resources are consumed with an eye towards short-term gain, the result can be a tragedy of the commons. For instance, when water is drawn from an aquifer faster than it refills, the immediate gains are undercut by the long-term danger of drought.
Detailed explanation-4: -The definition of the Tragedy of the Commons is an economic and environmental science problem where individuals have access to a shared resource and act in their own interest, at the expense of other individuals. This can result in overconsumption, underinvestment, and depletion of resources.
Detailed explanation-5: -The Tragedy of the Commons occurs when the demand for common resources outweighs the supply, leading to the depletion of resources. As a result of the Tragedy of Commons, in the end, no one is able to have access to the resources as they deplete due to their overuse.