To solve the common-pool problem in fishing, governments can _____ or _____.
A)provide a subsidy; restrict production to the socially optimal level
B)impose a tax; restrict output
C)impose property rights ; prohibit resource use entirely
D)impose a depletion tax; make property rights flexible
E)provide a subsidy; shutdown all firms in this industry

Question

To solve the common-pool problem in fishing, governments can _____ or _____.​
A)provide a subsidy; restrict production to the socially optimal level
B)impose a tax; restrict output​
C)impose property rights ; prohibit resource use entirely​
D)impose a depletion tax; make property rights flexible​
E)provide a subsidy; shutdown all firms in this industry​

Quizplus · Accepted Answer

By imposing a tax or limiting the output, the government can reduce the incentive for the fishermen to overfish and thereby solve the common-pool problem. A subsidy or shutting down the firms entirely may not address the fundamental issue of overfishing and may lead to other economic problems. Imposing property rights or a depletion tax may also not be practical in all cases.

To Solve the Common-Pool Problem in Fishing, Governments Can _____