Brian, Edison, and Kevin are loggers who live next to a forest that is open to logging; in other words, anyone is free to use the forest for logging. Assume that these men are the only three loggers who log in this forest and that the forest is large enough for all three loggers to log intensively at the same time. Each year, the loggers choose independently how many acres of trees to cut down; specifically, they choose whether to log intensively (that is, to clear-cut a section of the forest, which hurts the sustainability of the forest if enough people do it) or to log nonintensively (which does not hurt the sustainability of the forest). None of them has the ability to control how much the others log, and each logger cares only about his own profitability and not about the state of the forest. Assume that as long as no more than one logger logs intensively, there are enough trees to regrow the forest. However, if two or more log intensively, the forest will become useless in the future. Of course, logging intensively earns a logger more money and greater profit because he can sell more trees. The forest is an example of because the trees in the forest are and . Depending on whether Edison and Kevin both choose to log either nonintensively or intensively, fill in Brian's profit-maximizing response in the following table, given Edison and Kevin's actions. Edison and Kevin's Actions Log Nonintensively Log Intensively Brian's Profit-Maximizing Response Which of the following solutions could ensure that the forest is sustainable in the long run, assuming that the regulation is enforceable? Check all that apply. Outlaw intensive logging. Develop a program that entices more loggers to move to the area. Convert the forest to private property, and allow the owner to sell logging rights.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter11: Public Goods And Common Resources

Section: Chapter Questions

Problem 6PA

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6. Common resources and the tragedy of the commons

Brian, Edison, and Kevin are loggers who live next to a forest that is open to logging; in other words, anyone is free to use the forest for logging. Assume that these men are the only three loggers who log in this forest and that the forest is large enough for all three loggers to log intensively at the same time.

Each year, the loggers choose independently how many acres of trees to cut down; specifically, they choose whether to log intensively (that is, to clear-cut a section of the forest, which hurts the sustainability of the forest if enough people do it) or to log nonintensively (which does not hurt the sustainability of the forest). None of them has the ability to control how much the others log, and each logger cares only about his own profitability and not about the state of the forest.

Assume that as long as no more than one logger logs intensively, there are enough trees to regrow the forest. However, if two or more log intensively, the forest will become useless in the future. Of course, logging intensively earns a logger more money and greater profit because he can sell more trees.

The forest is an example of because the trees in the forest are and .

Depending on whether Edison and Kevin both choose to log either nonintensively or intensively, fill in Brian's profit-maximizing response in the following table, given Edison and Kevin's actions.

	Edison and Kevin's Actions
Log Nonintensively	Log Intensively
Brian's Profit-Maximizing Response		Which of the following solutions could ensure that the forest is sustainable in the long run, assuming that the regulation is enforceable? Check all that apply. Outlaw intensive logging. Develop a program that entices more loggers to move to the area. Convert the forest to private property, and allow the owner to sell logging rights.

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