100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
Previously searched by you
IB SL/HL Economics Paper 1: 'Referring to the difference between common access resources and recourses purchased by firms, explain why common access resources pose a threat to sustainability.'£3.49
Add to cart
IB SL/HL Economics Paper 1: 'Referring to the difference between common access resources and recourses purchased by firms, explain why common access resources pose a threat to sustainability.'
This document contains a detailed essay taken from a past IB Economics Paper 1 Question: 'Referring to the difference between common access resources and recourses purchased by firms, explain why common access resources pose a threat to sustainability.' This essay explains the difference between pr...
Referring to the difference between common access resources and
recourses purchased by firms, explain why common access resources
pose a threat to sustainability.
Common access resources are natural resources over which the is no established
private ownership. They are owned by no one and thus are available for anyone to
use. An example of a common access resource is the ocean, as water is not
owned by anyone and free for anyone to use. The difference between common
access resources and resources purchased by firms is that, unlike common access
resources, resources purchased by firms are privately owned and therefore the
manner in which they are used is different and more sustainable than that of
common access resources.
When the demand for a common access resource overwhelms the supply, the
consumption of a unit directly harms others who can no longer enjoy the benefits.
Seeing as this resource is common to all, each user is incentivised to maximise the
self gain from this resource by exploiting it. Due to a lack of price mechanism, there
is an insufficient allocation of the common resources, causing an economic market
failure known as the Tragedy of the Commons, which leads to shortages in
resources essential for humans and therefore poses a threat to sustainability. An
example of this is the overfishing of fish, like bluefin tuna in international fishing
waters such as the Mediterranean Sea. Due to the fish supply not being owned by
anyone, there is no incentive for fishermen to preserve the tuna population in the
sea in an attempt maximise their own self gain- profit. This is amplified by the fact
that such public good is non excludable but rival and will therefore result in a
destruction of these resources due to the overconsumption and under-maintenance
of this blue fin tuna population.
Fishing can also be a resource purchased by firm however- fish farms. In this
model there are property rights to the fish and therefore the owners have an
incentive to preserve the fish population for future profits. In such way the system is
far more sustainable and the fish stock is optimised due to the introduction of a
normal price mechanism which means that the fish supply can be allocated far
more effectively than when the fish are simply a common resource.
The tragedy of the commons is an economic problem that, due to its
unsustainability, impacts all humans. Earth’s atmosphere is a resource that
everyone on the planet uses and abuses through pollution and greenhouse gases,
increasingly damage this valuable, shared resource. This is causing climactic
changes that in the next century will have a great effect on our lives. Was our
atmosphere privately owned then this issue wouldn't exist as humans would have
an incentive not to damage our planet due to the self gain or profit which
emphasises the far greater extent of the threat that common access resources
pose to sustainability as opposed to resources which are privately owned.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller edoardocolao. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £3.49. You're not tied to anything after your purchase.
