Which of the following is one of the implications of the Tragedy of the Commons?

• A. Reduction in externalities
• B. Increased efficiency in resource allocation
• C. Guaranteed provision of public goods
• D. Overuse and depletion of shared resources

Answer: (D)

Verified step by step guidance

1. Understand the concept of the Tragedy of the Commons: it describes a situation where individuals, acting independently according to their own self-interest, overuse and deplete a shared resource, even though it is not in anyone's long-term interest for this to happen.
2. Recognize that the Tragedy of the Commons leads to overuse and depletion because each user receives the full benefit of using the resource but only bears a fraction of the cost of its depletion, causing a negative externality.
3. Analyze why the other options are incorrect: 'Reduction in externalities' is wrong because the Tragedy of the Commons actually involves negative externalities; 'Increased efficiency in resource allocation' is incorrect because the resource is overused, leading to inefficiency; 'Guaranteed provision of public goods' is unrelated because the commons are rivalrous and non-excludable, unlike pure public goods.
4. Conclude that the key implication of the Tragedy of the Commons is the overuse and depletion of shared resources due to individual incentives not aligning with collective well-being.
5. Summarize that this problem highlights the need for regulation, property rights, or collective agreements to manage common resources sustainably.