Which of these is/are TRUE?
I. The tragedy of the commons is MOST associated with pure private goods.
II. Highway congestion is an example of the tragedy of the commons because a new driver fails to consider the external costs of his using the road.
III. The tragedy of the commons is NOT an example of market failure.

Question

Quizplus · Accepted Answer

The tragedy of the commons is most associated with common resources, not pure private goods, making statement I false. Highway congestion is indeed an example of the tragedy of the commons because each additional driver does not consider the increased congestion their presence causes, making statement II true. The tragedy of the commons is considered a type of market failure because individuals acting independently and rationally according to each's self-interest behave contrary to the whole group's long-term best interests by depleting a common resource, making statement III false.

Which of These Is/are TRUE