the village of upper bigglesworth has a village commons, a
the village of upper bigglesworth has a village "commons," a piece of land on which each villager, by law, is free to graze his or her cows. use of the commons is measured in units of the number of cows grazing on it. assume that each resident has a constant marginal cost of sending cows to graze (that is, the marginal cost is the same, whether 1 or 10 cows are grazing).but each additional cow grazed means less grass available for others, and the damage done by overgrazing of the commons increases as the number of cows grazing increases. finally, assume that the benefit to the villagers of each additional cow grazing on the commons declines as more cows graze, since each additional cow has less grass to eat than the previous one.a. is the commons excludable or nonexcludable? is it rival in consumption or nonrival? what kind of good is the commons?b. draw a diagram, with the quantity of cows that graze on the commons on the horizontal axis. how does the quantity of cows grazing in the absence of government intervention compare to the efficient quantity? show both in your diagram.c. the villagers hire you to tell them how to achieve an efficient use of the commons. you tell them that there are three possibilities: a pigouvian tax, the task of property rights over the commons, and a system of tradable licenses for the right to graze a cow. explain how each one of these options would lead to an efficient use of the commons. draw a diagram that shows the pigouvian tax.
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