What are common property resources, and how does air traffic control relate to examples of market failure?
Understand the Problem
The question is asking for definitions and examples related to common property resources and market failures, specifically focusing on economic concepts like external costs and benefits, public goods, and the tragedy of the commons.
Answer
For Question 2: 'resources that are owned by the community at large'. For Question 3: 'a public good'.
For Question 2, the correct answer is 'resources that are owned by the community at large'. For Question 3, the correct answer is 'a public good'.
Answer for screen readers
For Question 2, the correct answer is 'resources that are owned by the community at large'. For Question 3, the correct answer is 'a public good'.
More Information
Common property resources are typically owned by the community at large and lack clearly defined property rights, leading to potential market failures. Air traffic control is considered a public good because it is non-excludable and non-rivalrous, and its provision requires government intervention.
Tips
A common mistake is confusing common property resources with public goods. Common property resources are accessible to the community, while public goods are non-excludable and provided by the government due to market inefficiencies.
Sources
- Why are common property resources subject to market failure due to ... - homework.study.com
- 6.3 Market Failure – Principles of Economics - Publishing Services - open.lib.umn.edu
- Market Failures, Public Goods, and Externalities - Econlib - econlib.org
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