A New York legislator wanted to create a deposit on cigarettes butts. If implemented, people would have the incentive to (1) not toss cigarette butts onto public streets and sidewalks, and (2) pick butts up to redeem them for the cash. The degradation of the environment from littered cigarette butts is a
A)private goods problem.
B)Nash equilibrium.
C)Tragedy of the Commons.
D)cost-benefit equilibrium.

Question

Quizplus · Accepted Answer

The degradation of the environment from littered cigarette butts is a classic example of the Tragedy of the Commons, where a shared resource is overused and depleted due to individuals' self-interested behavior. In this case, people dispose of cigarette butts on public streets and sidewalks without considering the negative impact it has on the environment. A deposit on cigarette butts would create the incentive to reduce this behavior and promote responsible disposal of the waste.

A New York Legislator Wanted to Create a Deposit on Cigarettes