Renewable and non-renewable resources

Question 1

What is the tragedy of the common goods?

Answer 1

Occurs when people overuse a shared resource, causing it to become damaged or depleted, harming everyone in the long run.

• E.g. overfishing leads to fewer fish for everyone

Question 2

Describe the relationships between rival/non-rival products and excludable and non-excludable products. Provide the 4 combinations and what they represents

Answer 2

1. Rival and excludable: Private goods. You have to pay to get included, once payed reduces the availability of that good for others.. E.g. clothes, houses, food, tickets
2. Non rival and excludable: Public utility services. You have to pay to get included, once payed there is unlimited availability. E.g. Netflix, internet, spotify
3. Rival and non excludable: Shared goods. You don’t have to pay to get included, but when consuming you reduce the avaliability of that good for others. E.g. Fishing, public beach
4. Non rival and no excludable: Public goods. You don’t have to pay to get included and there is unlimited availability. E,g, air, landscape, public parks

Question 3

What defines a renewable resource?

Answer 3

• Can be regenerated: Production rate > 0
• The resource regenerates itself if managed carefully, dvs when consumption < production rate

Question 4

What defines a non renewable resource?

Answer 4

Cannot be regenerated: Production rate=o
- The production rate of fossil fuels are higher than zero, but very close to zero, which makes it count as a non-renewable resource

Question 5

What are the 3 problems related to the tragedy of commons?

Answer 5

A: Actions of single individuals, impact the overall well being of the society

B: no Incentives to internalize the externalities
- No interest in taking responsibility

C: Incentive to free ride.- Enjoys the befits of a public good or shared resource without paying for it or contributing to its provision

A+B+C = RISK FOR SOCIETY!!!
e.g. Public spaces, pollution, hunting endangered species etc

Question 6

How can the tradegy of commons be prevented?

Answer 6

1. Privatization:
   “Confinement of land titles to individuals”
   - Create ownership
   - Obs! Does not solve every issue, for.e.g. not feasible with fishing since fish move freely in the ocean
2. State of confinement
   - The state owns the good and monitors the right use
   E.g. National park
3. Communal management
   - The local community manage the resource
   - E.g. sharing access to a common well for drinking water

Question 7

Why doesn’t non renewable resources have a sustainable yield?

Answer 7

Because they are not able to regenerate