A-Level经济题解析及练习Policy options for Common Resources

今日知识点：Policy options for Common Resources

例题

There is a medieval town where sheep graze on common land.  As the population grows, the number of sheep grows.  However, the amount of land is fixed, the grass begins to disappear from overgrazing.  The private incentives (using the land for free) outweigh the social incentives (using it carefully).The tragedy would be people can no longer raise sheep. What could the townspeople (or their government) have done to prevent the tragedy? 

解析

• Impose a corrective tax on the use of the land to “internalize the externality”

• Regulate use of the land (the “command-and-control” approach)

• Auction off permits allowing use of the land

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