When a person can pass some of her costs of using a resource on to someone else,

Question

Quizplus · Accepted Answer

When a person can pass some of her costs of using a resource on to someone else, she does not bear the full cost of her consumption, leading to overuse of the resource. This is because the external costs (those passed on to others) are not considered in her personal cost-benefit analysis, resulting in a higher consumption than if she were to bear all the costs herself.

When a Person Can Pass Some of Her Costs of Using