When too much of a common resource good is consumed, the marginal _____ of the good is less than the marginal:
A) private cost; social cost.
B) private benefit; private cost.
C) social benefit; social cost.
D) social cost; social benefit.

Question

Quizplus · Accepted Answer

When too much of a common resource good is consumed, it typically means that individuals are not accounting for the external costs their consumption imposes on others. Thus, the marginal private cost (the cost borne by the individual consumer) is less than the marginal social cost (the cost borne by society as a whole, including externalities).

When Too Much of a Common Resource Good Is Consumed