Multiple Choice
The gap between exports and imports in a nation's economy is called the ___________.
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8. The Types of Goods
The Free Rider Problem and the Tragedy of the Commons
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
The tragedy of the commons results when a good is:
A
non-rival in consumption and excludable
B
rival in consumption and excludable
C
rival in consumption and non-excludable
D
non-rival in consumption and non-excludable
Verified step by step guidance1
Step 1: Understand the key terms involved in the problem. 'Rival in consumption' means that one person's use of the good reduces the amount available for others. 'Non-rival in consumption' means one person's use does not reduce availability for others.
Step 2: Define 'excludable' and 'non-excludable'. A good is 'excludable' if people can be prevented from using it, usually through pricing or legal means. It is 'non-excludable' if it is difficult or impossible to prevent people from using it.
Step 3: Recall the concept of the tragedy of the commons. It occurs when a resource is rival in consumption (limited and can be depleted) but non-excludable (no one can be effectively prevented from using it), leading to overuse and depletion.
Step 4: Analyze each option in the problem by matching the definitions to the tragedy of the commons scenario. The tragedy arises specifically when the good is rival in consumption and non-excludable.
Step 5: Conclude that the correct characterization of the tragedy of the commons is a good that is rival in consumption and non-excludable, because this combination leads to overuse without effective control.
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