Answer to Question 1
The climate and the quality of the environment are considered public goods because no one can be excluded from consuming these goods, and one person's consumption of either good does not reduce the quantity that is available to others. This means that, because it can be costly to protect the environment, a single person or country has little incentive to do so.
A-head: ECONOMICS OF CLIMATE CHANGE
Concept: Public goods, tragedy of the commons
Answer to Question 2
A shortage arises at market prices below the equilibrium price. A shortage causes the price to rise, decreasing quantity demanded and increasing quantity supplied until the equilibrium price is attained.
Public setting
Environmental influences on obesity
Natural Causes of Climate Change
Climate has changed habitats evolution
Stakeholders on all sides of the climate debate
Environmental Science Toward a Sustainable Future