Early settlers in the town of Dry Gulch drilled wells to pump as much water as they wanted from the single aquifer beneath the town. (An aquifer is an underground body of water.)As more people settled in Dry Gulch, the aquifer level fell and new wells had to be drilled deeper at higher cost. Compared to a town in which all residents collectively decide on how much water to use, water use will likely be ________ in Dry Gulch.

Question

Quizplus · Accepted Answer

Collective decision-making in the other town will avoid the tragedy of the commons by taking into account the external cost of water use.

Early Settlers in the Town of Dry Gulch Drilled Wells