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Econ FQ #16 pg 48-51 Market Failures: Property Rights Through Public and Private Goods
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Why PRIMARILY does the existence of private
property seem natural to most of us?
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We grew up in a market economy
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acdec17
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Why PRIMARILY does the existence of private
property seem natural to most of us?
We grew up in a market economy
In a village with one lake full of fish, as additional
villagers go fishing, the average value of fish caught
would
decrease
A village trying to allocate its resources would invest
in a job ONLY if
its marginal contribution to village revenue
exceeds its marginal cost
Fish in a lake could be considered a
common resource
How could a village internalize an externality?
They could make decisions collectively.
Which definition BEST describes the tragedy of the
commons?
when people jointly own a resource and do not
account for the negative externalities caused
by its overuse
Which solution is the SIMPLEST for ameliorating
the effects of the tragedy of the commons?
creating property rights
Which good is CORRECTLY matched with its level
of excludability?
gasoline; private good
A private good has
high levels of excludability and rivalry in
consumption
A public good has
low levels of excludability and rivalry in
consumption
