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

• A. Consumers pay for a public good even if they do not use it.
• B. A government imposes a tax on pollution to reduce emissions.
• C. A private company restricts access to its land to prevent overuse.
• D. Individuals overfish a shared lake, leading to depletion of fish stocks for everyone.

Answer: (D)

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, leading to a loss for the entire group.
2. Identify the key characteristics of the tragedy of the commons: the resource is shared (common), it is rivalrous (one person's use reduces availability for others), and there is no effective way to exclude users.
3. Analyze each option to see if it fits these characteristics: paying for a public good does not involve depletion; government tax is a regulatory response, not the problem itself; private restriction prevents overuse, so it is a solution, not an example.
4. Recognize that 'Individuals overfish a shared lake, leading to depletion of fish stocks for everyone' perfectly fits the tragedy of the commons because the lake is a shared resource, and overfishing reduces fish available to all.
5. Conclude that the best illustration of the tragedy of the commons is the overfishing example, as it demonstrates how individual incentives can lead to collective resource depletion.