Question

In 50 words or less, explain why the world’s atmosphere is a public good.

In 20 words or less, what is the market failure associated with common pool resources?

Answer 1

1. A Public good is a product that an individual can consume without reducing its availability to others and of which no one is deprived . World atmosphere is also considered as a Public good because no one can be deprived of this atmosphere and also individuals can consume it without reducing it for other use. It acts a common pool of resources . Also in this way world atmosphere satisfy the two important property of public good that's is : non- exculdability (meaning no one can be excluded from enjoying it) and non- rivalry ( meaning one person's enjoyment of a good does not diminish the availability for other to enjoy it ). In this sense world atmosphere is regarded as a public good .
2. Common pool of resources are non- excludable and rival in nature which means no one can be excluded from using it and also one person's enjoyment of the good leads to reduction in its availability for others. This leads to problem of tragedy of commons because common resources are being overused. This type of market failure with common resources occur because consumption can be privately profitable even when it is socially undesirable.