Question:
The ‘Tragedy of the Commons’ refers to:
(1) the failure of the government to provide public goods.
(2) the overuse and depletion of a common-pool resource due to individual self-interest.
(3) the inefficiency caused by monopoly power.
(4) the negative impact of taxes on social welfare.
(5) the collapse of the stock market.
Correct Answer:
(2)
Answer Explanation:
Common resources (like ocean fish) are rival but non-excludable. Individuals have an incentive to consume as much as possible before others do, leading to resource depletion—a “tragedy” for the group.
Topic: Introduction Year: 2024
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