Question

Cattle grazing in a farmer's pasture does not suffer from the tragedy of the commons but explains why are fish in the ocean an example of a resource that suffers from the tragedy of the commons?

What is the marginal rate of substitution and how does it relate to an indifference curve?

Answer 1

Tragedy of commons is a phenomena that occurs only in common pool resources . This is because common resources like fish in ocean , congested roads , environment , biodiversity etc are rival but non-excludable in consumption . So a single person cannot have property rights over a common resource . Hence people tend to over exploit common resource for their own personal gains and not thinking about the health and replenishment of the resource . Like fish in the ocean is limited but is free for all , so fishermen try to catch as much as possible before other fishermen can take their share , this leads to over fishing for selfish gains . So  fish in the ocean is an example of a resource that suffers from the tragedy of the commons . But cattle grazing in a farmer's private pasture land , is both excludable and rival in consumption . The farmer will not allow over grazing because its a private land and he wants to protect his pasture .

MRS : The marginal rate of substitution (MRS) is the amount of a good that a consumer is willing to sacrifice in exchange for another good while maintaining same utility level . It is slope of indifference curve .