Question 2 : a) Some resources are private, others are common, and still, others

Question

Question 2: a) Some resources are private, others are common, and still, others are public. Define a private resource, common resource, and public resource, explain your definitions and provide one example of each.

b) What problem prevents the efficient provision and management of a common resource by private unregulated markets?

c) What problem prevents the efficient provision and management of a private good or service by private unregulated markets?

d) What is the obstacle to the efficient production by free markets of goods and services like national defense?

e) List one consequence of (b), (c), and (d) above and its possible solution.

Explanation / Answer

A common resource is those economics resources that available to every individual and provides benefits to the users but value decreases over a period of time.

The following the problem arise efficient use of common resources.

It is difficult to fix the market problem of thse resources

Since it is Public goods people use it for the careless attitudes over-exploitation of resources

"The tragedy of the commons" is is a situation where individual consuming thse economic resources where there own ways, in other words, exploitation these resources their own ways.This can be prevented following the ways

Educating the people about the importance of thse resources

Government regulations of thse resource to control overexploitation of the resource

Fixing the market value of the thse goods.

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