The Tragedy of the Commons Will Be Evident When a Growing

question 106

Multiple Choice

The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource. To correct for this problem, the town could

• A)allow individual shepherds to choose their own flock sizes.
• B)internalize the externality by subsidizing the production of sheep's wool.
• C)auction off a limited number of sheep-grazing permits.
• D)wait until the market corrects the problem.

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Definitions:

Record Keeping

The systematic process of organizing and maintaining documents, records, and information to ensure accuracy, accessibility, and compliance.

Composite Methods

Depreciation techniques that combine multiple assets into a single group or pool and apply a uniform depreciation rate to the collective group, irrespective of individual asset life.

Depreciation Expense

Distributing the expense of a physical asset throughout its serviceable duration.