Question

The lack of private ownership of certain resources like public lands or water can contribute to overuse. This is known as:

A) Market failure
B) Tragedy of the commons
C) Externalities
D) Public choice theory

Answer 1

The tragedy of the commons is the lack of private ownership of resources like public lands or water, resulting in overuse. It is an economic principle stating that resources held in common will inevitably be over-exploited. An example is when competing companies log as many trees as possible for financial gain until no trees remain.

Step-by-step explanation:

The lack of private ownership of certain resources like public lands or water that can contribute to overuse is known as the tragedy of the commons. This economic principle states that resources held in common will inevitably be over-exploited since no one owns them and no one has a financial interest in protecting their long-term value. An example of the tragedy of the commons is when competing companies log as many trees as possible for financial gain until no trees are left.