The Tragedy of the Commons Will Be Evident When a Growing

Multiple Choice

The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource. To correct for this problem, the town could

A) allow individual shepherds to choose their own flock sizes.
B) internalize the externality by subsidizing the production of sheep's wool.
C) auction off a limited number of sheep-grazing permits.
D) wait until the market corrects the problem.