Suppose that the city builds a new park that is advertised as being "open to the public, " and within two months the grass in the park is ruined by overuse.This would be an example of
A)a nonrenewable resource
B)a private good
C)the common pool problem
D)a positive externality
E)a renewable and excludable resource

Question

Quizplus · Accepted Answer

The overuse of the park by the public demonstrates the common pool problem, which occurs when a resource is open to the public and individuals act in their own self-interest, resulting in depletion or degradation of the resource. This can be seen in situations such as overfishing in the ocean or overcrowding in public parks. The other options do not accurately describe the situation. Nonrenewable resources are finite, while the grass in the park can regenerate with proper management. Private goods are exclusive and have a designation owner, while the park is open to the public. Positive externalities are benefits that spill over to third parties, but the situation described here is a negative externality (the overuse of the park has a negative impact on the park). A renewable and excludable resource can be managed through exclusive ownership or management, while a public park is open to all.

Suppose That the City Builds a New Park That Is