2.3 Common Pool Resources

Question 1

what are private goods

Answer 1

rivalrous and excludable

Question 2

what are common pool resources

Answer 2

non-excludable and rivalrous

Question 3

market failure that arises from common pool resources

Answer 3

• depletion of resources
• over-use of good

Question 4

what are public goods

Answer 4

non-excludable and non-rivalrous

Question 5

market failure that arises from public goods

Answer 5

missing market d(due to the free-rider problem)

Question 6

another name for common pool resources

Answer 6

common access resources

Question 7

what does rivalrous mean

Answer 7

consuming something uses it up meaning it is no longer available for someone else to use

Question 8

what does excluability mean

Answer 8

it is possible to stop someone from enjoying/receiving the benefits of a good

Question 9

how are excluable goods rationed

Answer 9

the price mechanism

Question 10

examples of common pool resources

Answer 10

• fishing in oceans/rivers/lakes
• clean air and water
• stable climate
• foraging (e.g. acorns in korea)
• common grazing land

Question 11

why are common pool resources degraded/depleted?

Answer 11

they are non-excludable and thus don’t have a market which rations their use and no price mechanism to take price into consideration

Question 12

example of depeltion of common pool resources

Answer 12

• overfishing (threat to sustainability of fish stocks and bio diveristy)
• overgrazing (soil eroision & loss of grazing land)
• overforaging (loss of food for wildlife & disruption of biodiversity)
• drought & pollution
• climate change

Question 13

name for depletion of common pool resources

Answer 13

tragedy of the commons

Question 14

how does the tragedy of the commons lead to market failure?

Answer 14

because of the depletion of resources and individual long term needs are not met

Question 15

solution to depletion of common pool resources

Answer 15

collective self-governance

Question 16

what is collective self-governance

Answer 16

the idea that communities may be able to develop their own systems and mechanisms for managing and limiting resources because their own well-being depends on preserving resuources

Question 17

example that proves collective self-governance

Answer 17

ostrom’s research shows that collective self-governance is effective if these conditions are met:
(1) users of the resources haev effective methods of communication
(2) there is a clear bounary to the area being managed (e.g. lake or wood)

Question 18

the bigger the area (collective slef-governance)

Answer 18

the more difficult communication becomes

Question 19

insights of ostrom’s research

Answer 19

• shows non-excludability isnt a poroblem if users cna cooperate and communicate
• shows that gov intervention may not be needed
• shows that individuals are able to put aside short-term self-interests in order to achieve collective ling-term interests

Question 20

limitations of ostrom’s research

Answer 20

doesn’t provide hope for natural resources where there are no clear boundairies (e.g. oceans, climate change)

Question 21

possible gov intervention to manage use of common access resources

Answer 21

• laws (quotas to limit fisherman, license to limit fishermen, restrictions on the catching of egg-carrying female libsters, foraging illegal)
  -international compliannce/agreements (e.g. 1988 ban on whaling)

Question 22

examples of public goods

Answer 22

• national defence
• lighthouses
• street lighting
• police
• flood control

Question 23

market failure in public goods

Answer 23

there is a missing market because no profit-maxmising firm would be willing to sell a god it cannot sell at some price

Question 24

solutions to market failure of public goods

Answer 24

• gov provision
• finding ways to make the public good excludable
• contracting to the private sector

Question 25

example of making public goods excludable

Answer 25

• toll roads
• baoting locenses
• road taxes

Question 26

government provision in public goods

Answer 26

using tax revenue to finance the direct provision by the gov

Question 27

what are quasi public goods

Answer 27

• non rivalrous (like public goods)
• exclduable (like rivate goods)

Question 28

example of quasi public goods

Answer 28

bridges and roads via toll barriers, public swimming pools with entrance fees, museums

Question 29

pros of contracting public goods out to the private sector

Answer 29

• competitive so that the lowest price can be found
• better quality control
• access to broader range of skills and tech
• more flexible and innvoate than gov
• may be less costly

Question 30

cosn of