Reference no: EM13886756

Common resources versus private goods

Spring is here, and Becky and her dad would like to go fishing for the weekend in Washington. Becky could either go to the river in town where anyone can fish without a permit, or she could drive up to a stream located on her family's property in the countryside to fish. Assume that, no matter where people fish, all of the fish that are caught would be kept (that is, there is no "catch and release" policy).

The fish in the river are considered (non rival in consumption/ rival in consumption) and (excludable/ non excludable)  whereas the fish in the private stream are (non rival in consumption/ rival in consumption ) and (excludable/ non excludable . In other words, the fish in the river are an example of , and the fish in the private stream are an example of (club good, private good, public good or common recourses).

Fishing in the river will likely lead to (the rider problem, the moral hazard or the tragedy of the commons) because of which of the following reasons?

(Pick the correct answer below)

All fishermen will choose to fish in the stream believing that there are more fish there.

All fishermen will choose to fish in the river because of the limited access to the stream.

Nobody will enjoy fishing because of the lack of private contributions to the maintenance of the river.

Anyone can fish in the river, and one person's fishing activity decreases the ability of someone else to fish with success.