Review three methods that might achieve the efficient use of a common resource and explain the obstacles to efficiency

What will be an ideal response?

There are three different methods that government can use to obtain the efficient allocation of resources in the event of a common resource:
• Property Rights are assigned to private property, which is a resource that someone owns and has an incentive to use in a way that maximizes its value. However, assigning property rights to resources is not always feasible, such as with the fish that migrate over the vast depths of the oceans.
• Production Quotas can be set for total catch and divided among harvesting consumers so that the marginal social benefit from harvesting equals the marginal social cost of harvesting. However, it is in every harvester's best interest to cheat on the quota, because marginal private benefit from exceeding the quota allotment is greater than the marginal cost of harvesting.
• An Individual Transferable Quotas (ITQ) is a production limit that is assigned to an individual harvester who is free to transfer the quota to someone else.