Economics (Principles of Micro Economics)

Question 1;The tragedy of the commons is an economic problem in which individuals deplete a shared resource despite the common good. Private market alternatives to taxes or regulations can help mitigate the externalities of the tragedy of the commons. For example, property rights can be implemented to encourage individuals to take responsibility for their resources. This gives individuals an incentive to take ownership of their resources and manage them efficiently and sustainably. Another option is to create tradable permits, which allow individuals to buy and sell their rights to use a resource. This creates an economic incentive to use the resource responsibly, as individuals can profit from selling their permits. Overall, private market alternatives to taxes and regulations can effectively mitigate the externalities of the tragedy of the commons.