Which of the Following Best Exemplifies a Potential Tragedy of the Commons

question 10

Multiple Choice

Which of the following best exemplifies a potential tragedy of the commons?

• A) Everyone shows up at the party wearing the same pink shirt.
• B) Nobody cleans the lake after pollutants are accidentally spilled in it.
• C) Multiple shepherds allow their sheep to graze on a plot of land.
• D) A rainforest is cut down to build housing.

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Definitions:

Tax

A required financial imposition or alternative type of assessment placed on taxpayers by government entities to support government budgeting and assorted public outlays.

Efficient Level

Refers to the state where resources are allocated in a way that maximizes the net benefit to society, often achieved when marginal cost equals marginal benefit.

Competitive Output

The level of production that firms in a perfectly competitive market produce and sell at the market price, where marginal cost equals marginal revenue.

Competitive Price

A pricing strategy where the price of a product or service is set based on the prices charged by competitors.