Question

Tragedy of the commons is often referred to as a collective action problem because: Select one: a. Prices are too high which reduces welfare for everyone b. Common pool resources are both excludable and rivalrous c. Everyone tries to take an action at the same time causing crowding out d. A collection of individuals may find itself in in a situation where the group is better off if all contribute to the common good, but each group member has incentive to free ride

Answer 1

Answer: Option (d) is correct.

Step-by-step explanation:

Tragedy of commons is a situation in which there is a shared resource system where all the users reacting independently because of their self interest and also behaving conversely through the collective action.

In a tragedy of commons, commons refers to the goods that are non excludable, can be shared and not regulated such as oceans, rivers, fish pounds, roads, etc.

Hence, tragedy of commons generally includes over exploitation of the resources that are to be shared. It would be better for everyone if there is a efficient use of the resources but it is difficult to implement because of the free rider problem.