4. Common resources versus private goods Spring is here, and Nick and his uncle

Question

4. Common resources versus private goods

Spring is here, and Nick and his uncle would like to go fishing for the weekend in Florida. Nick could either go to the river in town where anyone can fish without a permit, or he could drive up to a stream located on his family's property in the countryside to fish. Assume that, no matter where people fish, all of the fish that are caught would be kept (that is, there is no "catch and release" policy).

The fish in the private stream are considered (rival in consumption/nonrival in consumption?) and (excludable/nonexcludable?) whereas the fish in the river are (rival in consumption/nonrival in consumption?) and (excludable/nonexcludable?). In other words, the fish in the private stream are an example of a (common source/public good/private good/club good?) , and the fish in the river are an example of  (common source/public good/private good/club good?)

Fishing in the river will likely lead to (moral hazard/tragedy of the commons/the free-rider problem?) because of which of the following reasons?

A. All fishermen will choose to fish in the river because of the limited access to the stream.

B. Anyone can fish in the river, and one person's fishing activity decreases the ability of someone else to fish with success.

C. All fishermen will choose to fish in the stream believing that there are more fish there.

D. Nobody will enjoy fishing because of the lack of private contributions to the maintenance of the river.

4. Common resources versus private goods

Explanation / Answer

a) Rival in consumption

b) Excludable

c) Rival in consumption

d) Nonexcludable

e) Private good (Fish in private stream)

f) Common resource (Fish in the river)

g) Tragedy of the commons

h) B. Anyone can fish in the river, and one person's fishing activity decreases the ability of someone else to fish with success.

Related Questions

Navigate

• Browse (All)
• Browse 4
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.