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Economics
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31 Oct 2020

7. The tragedy of commons is a parable that illustrates why

a. common resources are overconsumed
b. public goods are underproduced
c. private goods are under-consumed
d. natural monopolies overproduce goods.

Booster class
Microeconomics
Skill
Understanding the concept of Public Goods
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Raushan Raj
Raushan RajLv8
31 Oct 2020

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Related questions

32. Which of the following statements about public goods is true? (a) The production of public goods is subject to the free-rider problem. (b) Public goods are associated with the tragedy of the commons. (c) Public goods can be produced without cost. (d) A private market will produce the efficient quantity of a public good only if the market is perfectly competitive.

Private producers have no incentive to provide public goods because:

a. the government subsidy granted is usually insufficient to enable private producers to make a profit.

b. production of huge quantities of public goods entails huge fixed costs.

c. they cannot avoid the tragedy of the commons.

d. once produced, it will not be possible to exclude those who do not pay for the good.

34. The tragedy of the commons arises because (a) People have an incentive to over-consume common resources because they cannot prevent others from consuming the good. (b) Free-riders cannot be forced to pay for the public good. (c) The government bureaucracy leads to inefficiency. (d) People have an incentive to over-consume public goods because they cannot prevent others from consuming the good.

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