Question

the basic cause of deadweight losses from the existence of common resources and externalities is a lack of clearly defined and enforceable property rights. the self-interested rationality of human beings. the use of a market system to deal with scarcity. the absence of government intervention.

Answer 1

Deadweight loss is the loss in social surplus due to inefficient production. It is caused by a lack of property rights, self-interested rationality, and absence of government regulation. Common resources and externalities are affected by deadweight losses due to the lack of government intervention.

Step-by-step explanation:

Deadweight loss is the loss in social surplus that occurs when the economy produces at an inefficient quantity. It is caused by a lack of clearly defined and enforceable property rights and the self-interested rationality of human beings. The absence of government intervention can also contribute to deadweight losses.

For example, in the case of common resources and externalities, the lack of government regulation can lead to overuse or underpricing of these resources, resulting in deadweight losses.