Common resources?

Question

You are the new Forest Service Commissioner and have been instructed to come up with ways to preserve the forest for the general public. To maintain the efficient level of tree harvesting, you decide to create a system of tradable licenses.

Which of the following pieces of information do you need to know in order to supply the efficient quantity of licenses?

A. The external benefit of logging a tree at the socially efficient harvest amount

B. The socially efficient harvest amount

C. The increase in the marginal social cost of logging an additional tree from the socially efficient harvest amount

D. None of these

Answer 1

In economics, a commonl resource (CPR), alternatively termed a common property resource, is a particular type of good consisting of a natural or human-made resource system, the size or characteristics of which makes it costly, but not impossible, to exclude potential beneficiaries from obtaining benefits from its use. Unlike pure public goods, common  resources face problems of congestion or overuse, because they are subtractable. A common resource typically consists of a core resource, which defines the stock variable, while providing a limited quantity of extractable fringe units, which defines the flow variable. While the core resource is to be protected or entertained in order to allow for its continuous exploitation, the fringe units can be harvested or consumed.

The term "common property regime" refers to a particular social arrangement regulating the preservation, maintenance, and consumption of a common resource. The use of the term "common property resource" to designate a type of good has been criticised, as common resources are not necessarily governed by common property regimes.