Multiple Choice
Which of the following scenarios best explains the concept of the tragedy of the commons?
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8. The Types of Goods
The Free Rider Problem and the Tragedy of the Commons
Multiple Choice
Which of the following is the best example of the tragedy of the commons?
A
A monopoly setting prices above marginal cost
B
A consumer choosing between two brands of cereal
C
A person benefiting from national defense without paying taxes
D
Overfishing in a public lake leading to depletion of fish stocks
Verified step by step guidance1
Understand the concept of the tragedy of the commons: it occurs when individuals, acting independently according to their own self-interest, overuse and deplete a shared resource, leading to a loss for the entire group.
Analyze each option to see if it involves a shared resource being overused or depleted due to individual self-interest without adequate regulation or ownership.
Recognize that a monopoly setting prices above marginal cost is about market power and pricing, not about shared resource depletion.
Note that a consumer choosing between two brands of cereal is a private choice and does not involve a common resource being overused.
Identify that overfishing in a public lake is a classic example of the tragedy of the commons because the fish stock is a shared resource that can be depleted when individuals fish excessively without restrictions.
