Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN: 9781337091992
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 11, Problem 4QR
To determine

Common resources.

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Define and give an example of a common resource.  Without government intervention, will people use this good too much or too little?  Explain.
How are important values such as sustainability reflected in the marketplace today?
Left to its own devices, a free-market economy will not result in the level of environmental quality that people want.  Firms pollute, and people make expenditures without concern for environmental consequences.  We need some level of government intervention to ensure those decisions take account of other people’s concerns.  However, regulation cost tax dollars and is an infringement of liberty. How can we determine how much environmental quality we want and what is the best way of getting it?
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