Asked by Carmen Mclaurin on May 07, 2024
Verified
One difficulty in managing common property resources is that:
A) the monopoly firm that owns such a resource typically has great economic power, so that breaking it up into smaller firms is not practical.
B) the monopoly firm that owns such a resource typically is a natural monopoly, so that it is undesirable to break it up into smaller firms.
C) many common property resources are so small that management would have to be done on a micro level, greatly increasing government activity in the economy.
D) many common property resources are so vast that single ownership or management of them is not practical, especially if they cross international borders.
E) more and more of them come into being as pollution increases.
Common Property Resources
Resources like land, air, and water that are not owned privately but are available for use by an entire community or society.
Single Ownership
A business model where a single individual owns all of the firm's stock and is solely responsible for its decisions.
Cross International Borders
The movement of goods, services, capital, and people across the political boundaries of different countries.
- Gain an understanding of the basic principles governing common property resources and the difficulties encountered in managing them effectively.
Verified Answer
MR
Melissa RamosMay 07, 2024
Final Answer :
D
Explanation :
Many common property resources, such as oceans, forests, and wildlife, are so vast that single ownership or management of them is not practical, especially if they cross international borders. This makes it difficult to establish clear and enforceable property rights, and leads to the tragedy of the commons where individuals exploit the resource for their own gain without regard for its long-term sustainability. This difficulty in managing common property resources is a classic example of a market failure that requires government intervention to address.
Learning Objectives
- Gain an understanding of the basic principles governing common property resources and the difficulties encountered in managing them effectively.