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CA Foundation P4 · Chapter 7 · Question 12 of 15

The 'tragedy of the commons' refers to:

Test yourself: pick an answer

Reveal answer & explanation

Correct answer: D) Over-use and depletion of a common-property resource because no one owns it

Explanation

Common-property resources such as open fisheries or grazing land are rival but non-excludable. Each user ignores the cost his use imposes on others, leading to over-exploitation and possible depletion. Assigning property rights or regulation can address it.

All 15 questions in Chapter 7Public Finance MCQs with answers

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