Unit 4: Common goods (MC)

Questions and Answers

What is the core issue in 'The Tragedy of the Commons'?

Equal distribution of resources to all users

Shared resources being overused for individual gain (correct)

Shared benefits but individual costs

Unlimited resources that can support an infinite population

Which of the following is an example of a Toll Good?

A shared fishing pond

Air pollution

Public park

Netflix subscription (correct)

Which of the following best describes a Common Good?

Excludable and non-rivalrous

Non-excludable and rivalrous (correct)

Non-excludable and non-rivalrous

Excludable and rivalrous

What happens when herdsmen overgraze a shared pasture in the 'Tragedy of the Commons' example?

It benefits only the herdsman adding the extra cattle, but harms others Signup and view all the answers

What is an example of a Private Good?

Popcorn at a movie theater Signup and view all the answers

According to the document, how is pollution related to the commons?

It is about adding waste into the commons, like pollutants or chemicals Signup and view all the answers

Which of the following is a challenge in addressing climate change through mutual coercion (regulations and taxes)?

Difficulty in globally enforcing environmental regulations Signup and view all the answers

What is the purpose of carbon taxation?

To increase the individual costs of carbon emissions Signup and view all the answers

What is one key feature of Elinor Ostrom's solution to managing common resources?

Self-governance by communities Signup and view all the answers

Which of the following is NOT one of the design principles for community-based resource management according to Elinor Ostrom?

High taxation on resource use Signup and view all the answers

Why is scaling bottom-up institutions (like community management) globally difficult?

Each common resource is unique, and rules need to be context-specific Signup and view all the answers

Which of the following is a challenge when trying to manage emissions through a bottom-up approach?

The approach lacks trust and cooperation between community members Signup and view all the answers

Study Notes

The Tragedy of the Commons

The core issue is the overuse of shared resources for individual gain, leading to depletion (Answer: B).
A common example involves herdsmen overgrazing, which benefits the individual herdsman but harms the overall resource quality (Answer: B).

Types of Goods

Toll Good: Access requires payment, exemplified by a Netflix subscription (Answer: B).
Common Good: Defined as non-excludable and rivalrous, making it available to all but subject to depletion (Answer: C).
Private Good: Excludable and rivalrous, such as popcorn sold at a movie theater (Answer: B).

Pollution and the Commons

Pollution adds waste to the commons and impacts communal resources negatively (Answer: B).

Addressing Climate Change

Mutual coercion through regulations and taxes faces difficulty in global enforcement, complicating climate change mitigation efforts (Answer: B).

Carbon Taxation

The primary goal of carbon taxation is to increase the individual costs associated with carbon emissions (Answer: B).

Elinor Ostrom's Solutions

Ostrom advocates for self-governance by communities to manage common resources, contrasting with top-down control and privatization (Answer: C).
Important design principles include adapting rules to local conditions, defining user and resource boundaries, and instituting monitoring and sanctions (answer: C is not a principle).

Challenges of Scaling

Unique characteristics of each common resource make it challenging to apply bottom-up community management globally, as rules need to be context-specific (Answer: B).
Bottom-up approaches may struggle with issues of trust and cooperation among community members, hindering effective emission management (Answer: B).

Description

Test your knowledge on key concepts from Chapter 5 of Economics, focusing on the Tragedy of the Commons and the characteristics of Toll Goods. This quiz includes questions about resource management and economic principles. Ensure you understand the implications of shared resources in economic theory.