Lilt Il Lt lOt ppular spots such as Annapolis Rock had more mo t be éven hly pri

Question

Lilt Il Lt lOt ppular spots such as Annapolis Rock had more mo t be éven hly priced access? Why do you think we don't see more market solutions tragedy of the commons? llowing information to answer Problems 5 to7 Ispring runs under land owned by ten people. Each person has the right to and can take water from the spring at a constant marginal cost of $5 a TABLE 2 Quantity Marginal M of water external gallons per day) (dollars per g aable 2 sets out the marginal external cost and the marginal social benefit cost the water Draw efficient quantity of water taken. If the government sets a production quota on the total amount of water such that the spring is used efficiently, what would that quota be? raph to illustrate the market equilibrium. On your graph, show the 7. If the government issues ITQs to land owners that limit the total amount of water taken to the efficient quantity, what is the market price of an ITQ? 8. Waukesha deserves a shot at Great Lakes water supply The city of Waukesha, Wis., has applied to borrow water from Lake Michigan under the Great Lakes Compact, an agreement between the states and Canadian provinces that border the Great Lakes designed to meet long- term drinking water needs for communities like Waukesha Source: www.startribune.com, December 11, 2015 ls water in the Great Lakes a public good, a private good, or a common resource? What are the goals of the Compact? How might they be achieved? 9. The Great Pacific Tuna Cartel Eight small Pacific islands with control of 5.5 million square miles of prime una fishing waters, have tripled the access fee for U.S. tuna fishers from l million to $63 million and increased monitoring of these waters. The Wall Street lournal, March 20, 2013

Explanation / Answer

For questions 5-7 take is needed. So I answer question 8.

8) lake is a common resource good. A good is a common resource good if it is rivalrous and non excludable.

People cannot be excluded from benefiting from lake.

Goals of Great lakes compact are to prevent lake's overuse and to develop efficiency and conservation of lake water. The compact mandate the states to develop efficiency and conservation program to prevent overuse of lake and Matheson efficiency. Ban on new diversion of water is imposed. Sustainable use of water is expected from the states. This is how goals of the compact are to be achieved.

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