4. Common resources versus private goods Spring is here, and Becky and her dad w

Question

4. Common resources versus private goods

Spring is here, and Becky and her dad would like to go fishing for the weekend in Washington. Becky could either go to the river in town where anyone can fish without a permit, or she could drive up to a stream located on her 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).

Pick the correct answer from the hilighted section below

The fish in the river are considered (non rival in consumption/ rival in comsumption ) and (excudable/ non excludable)  whereas the fish in the private stream are (non rival in consumption/ rival in comsumption ) and (excudable/ non excludable . In other words, the fish in the river are an example of , and the fish in the private stream are an example of (club good, private good, public good or common resourses  ).

Fishing in the river will likely lead to (the rider problem, the moral hazard or the tradgedy of the commons)    because of which of the following reasons?

Explanation / Answer

Anyone can fish in the river. However, fish caught by one decreases the quantity of fish available for others to catch.

So, fishing in river are rival in consumption and non-excludable.

Fishing at private property is rival in consumption but excludable.

Thus,

The fish in the river are considered rival in consumption and non-excludable whereas the fish in the private stream are rival in consumption and excludable.

In other words, the fish in the river are example of common resource and the fish in the private stream are an example of private good.

Fishing in the river will likely lead to the tragedy of commons because anyone can fish in the river, and one person's fishing activity decreases the ability of someone else to fish with success.

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