Which of the Following Applies to the Tragedy of the Commons

question 141

Multiple Choice

Which of the following applies to the tragedy of the commons and a common resource?
i.In the absence of government action,there are no incentives to prevent the overuse of the common resource.
ii.When consumers take account of the marginal social benefit and marginal cost,overuse of the common resource occurs.
iii.Even with government action,it is impossible to achieve the efficient level of use of a common resource.

• A) i only
• B) i and ii
• C) ii and iii
• D) i, ii, and iii
• E) ii only

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Definitions:

Overstated

A term used when the value of an asset or income is recorded higher than it actually is, leading to inaccuracies in financial reporting.

Liability Account

A financial reporting category used to track obligations or debts a company owes to others.

Expense Account

An account in which all expense transactions are recorded; it reflects the cost of operating a business.

Understated

Describes financial statements or figures that are reported at a value lower than the actual or correct value, potentially misleading financial analysis.