Consider the following problems: overcrowded public highways, overfishing in the ocean, polluted air, and the near-extinction of the wild rhinoceros. What do these problems have in common?
A)Private markets could easily solve them if governments left the markets alone.
B)They would all go away if the government sponsored an intensive public-information campaign.
C)They are all the result of a failure to establish clear property rights over something of value.
D)They are all the result of a failure of corrective taxes.

Question

Quizplus · Accepted Answer

The problems listed are all the result of a failure to establish clear property rights over something of value. This lack of clear ownership leads to issues such as overuse or overconsumption of resources, pollution, and exploitation of endangered species. Private markets and public-information campaigns may help alleviate these problems to some extent, but the fundamental issue of unclear property rights must be addressed in order to achieve lasting solutions. Corrective taxes may be one potential solution to help establish clear property rights by making it costly to engage in activities that cause harm to the common property.

Consider the Following Problems: Overcrowded Public Highways, Overfishing in the Ocean