Solving a Tragedy of the Commons Problem Could Be Done

question 123

Multiple Choice

Solving a tragedy of the commons problem could be done through:
I. societal expectations.
II. tradable allowances.
III. government command and control methods.

• A) II only
• B) I and II only
• C) II and III only
• D) I, II, and III

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Definitions:

Market Failure

A situation where the allocation of goods and services by a free market is not efficient, often leading to negative externalities or a lack of public goods.

Competitive Market

A market structure characterized by a large number of buyers and sellers, free entry and exit, and a product for which each seller offers an identical product.

Deadweight Loss

A loss in economic efficiency that occurs when equilibrium for a good or service is not achieved or is not achievable.

Price Floor

A government-imposed limit on how low a price can be charged for a product, service, or commodity.