The tragedy of commons relates to the idea that
A) central planning sets all production targets.
B) all wages, prices, and interest rates are controlled by government.
C) collective ownership may not provide the proper private incentives for efficiency because individuals do not bear the full costs of their own decisions, but enjoy the full benefits.
D) central planning sets all distribution targets.

Question

Quizplus · Accepted Answer

The tragedy of commons refers to the situation where a commonly shared resource is overused and depleted because individuals do not bear the full costs of their own decisions, but enjoy the full benefits. In other words, collective ownership may not provide the proper private incentives for efficiency, as there is a lack of incentives to conserve the resource for future use. Choices A, B, and D refer to central planning, which is not related to the tragedy of commons.

The Tragedy of Commons Relates to the Idea That