Publicly owned resources will always be abused. Take the example of cattle grazing. Where the individual has free access to publicly owned rangeland, he or she always has an incentive to graze more and more cattle regardless of the consequences, because the benefits are captured by the individual grazer while the costs of reduced range quality are borne by all taxpayers. Private landowners are less likely to abuse their own land, however, because they must pay the entire cost.
Which one of the following could be best supported by the same type of reasoning as that exhibited in the passage?
(A) The supply of beverages at the annual office picnic will last longer if people pay for them on a per-beverage basis rather than everyone in the office being charged a flat fee.
(B) A math teacher provides his students with after-school tutoring on several days because no single day is good for everyone.
(C) A tennis club starts charging flat annual membership fees instead of pay-as-you-play court fees in order to ensure a regular club income.
(D) A social service agency varies its charges for services because some people are able to pay more than others.
(E) A tobacco tax is instituted in order to fund improvements in public education.
Both A and C are close but since C is not saying anything about abusive usage of tennis court. An additional assumption is required to support the reasoning that court would be abusively used if flat annual membership fees is charged.
A, on the other hand, uses similar reasoning as that of argument but reverses the sequence. For beverages to last longer people must pay on a per-beverage basis instead a fat fee which might have resulted in abusive usage.
IMO Answer A.
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Pain + Reflection = Progress | Ray Dalio
Good Books to read prior to MBA