Which of the following scenarios best explains the concept of the tragedy of the commons?

• A. A company provides free Wi-Fi, and some users benefit without paying for the service.
• B. Villagers overfish a shared lake, leading to depletion of fish stocks for everyone.
• C. A farmer invests in new machinery to increase the productivity of their private land.
• D. A government imposes a tax on pollution to reduce negative externalities.

Answer: (B)

Verified step by step guidance

1. Step 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. Step 2: Identify the key elements of the tragedy of the commons: a shared resource, individual incentives to overuse it, and the eventual depletion or degradation of that resource.
3. Step 3: Analyze each scenario to see if it involves a shared resource being overused or depleted due to individual actions without proper regulation or cooperation.
4. Step 4: Recognize that the scenario where villagers overfish a shared lake fits the tragedy of the commons because the lake is a common resource, and overfishing by individuals reduces fish stocks for everyone.
5. Step 5: Contrast this with other options: free Wi-Fi involves a public good but not depletion; investing in private land is about private property; and government pollution tax is a policy response to externalities, not an example of the tragedy itself.