Question

In regards to Economics, why do wild salmon populations face the threat of extinction while pet goldfish are in no such danger? Explain by identifying which of the two is private good and which one is a common resource. Your response should be NO less than 150 words.

Answer 1

Let us first talk about salmon which is a common resource . People make profits by catching and selling salmon for consumption . We know that common resources are non- excludable and rival in consumption . So a major problem with such resources is overuse . Also called the problem of tragedy of commons or free rider problem . Each one tries to catch as much as possible before they are all extinct but are not ready to invest in salmon protection and growth . When left unprotected and unregulated salmons are caught in large numbers and people try to catch more and more to make more profits . So they face the threat of extinction .

Goldfish on the other hand is a private good which is both excludable and rival in consumption . They are bred and sold in privately owned farms . People cannot exploit it as a common resource since they have property rights who manufacture and sell gold fish . So their population grows faster .