Answer
A common resource is a ‘partial’ public good which is non-excludable but rivalrous. An example is mineral deposits or fishing stocks in the oceans. Without government intervention, people will use this good too much. This is because they are non-excludable, leading to over-exploitation as a form of market failure. Each individual considers their own benefits and costs of using the good, ignoring the negative impact their use has on others. Gradually, a common resource will become depleted, being rivalrous in nature. This is known as the Tragedy of the Commons.
Work Step by Step
The definition of a common resource is a good which is non-excludable but rivalrous. Being non-excludable, individuals ignore the negative impact their use has on depleting the common resource. Without government intervention regulating the use of the common resource, people will use it too much leading to the Tragedy of the Commons.
