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Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050

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BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050
Textbook Problem

Common resources are

a. efficiently provided by market forces.

b. underprovided in the absence of government.

c. overused in the absence of government.

d. a type of natural monopoly.

To determine
Characteristic of a common resource.

Explanation

Option (c)

Common resources are rival and non-excludable in consumption so they are over utilized in the absence of government. When one person consumes a common resource, others are worse off since they are left with fewer goods but it would not prevent other person from using it.Thus, option ‘c’ is correct.

Option (a)

Since common resources are free of charge, market would fail to provide an efficient outcome...

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