Which of the following best illustrates the tragedy of the commons?

• A. Overfishing in a public lake leading to depletion of fish stocks
• B. A company polluting its own private land
• C. A government imposing a tax on luxury goods
• D. A consumer refusing to pay for a public good but still benefiting from it

Answer: (A)

Verified step by step guidance

1. 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 that is accessible to all, leading to long-term collective loss.
2. Identify the key characteristics of the tragedy of the commons: the resource is common (non-excludable), rivalrous (one person's use reduces availability for others), and there is no effective regulation or ownership to prevent overuse.
3. Analyze each option by checking if it involves a shared resource being overused due to lack of exclusive ownership or regulation:
4. Recognize that 'Overfishing in a public lake leading to depletion of fish stocks' fits the tragedy of the commons because the lake is a shared resource, and individual fishermen have incentives to catch as many fish as possible, which can lead to depletion.
5. Contrast this with other options: pollution on private land is not a common resource issue, government taxes on luxury goods are policy tools, and free-riding on public goods is related but distinct from the tragedy of the commons.