In the summer of 1992, when the Northern Cod biomass fell to 1% of earlier levels, the Canadian Federal Minister of Fisheries and Oceans, John Crosbie, declared a moratorium on the Northern Cod fishery, which for the preceding 500 years had largely shaped the lives and communities of Canada's eastern coast. A major factor that contributed to the depletion of the cod stocks off the shores of Newfoundland was the introduction of equipment and technology that increased the volume of landed fish. From the 1950s onwards, new technology allowed fishermen to trawl a larger area, fish deeper, and for a longer time. By the 1960s, powerful trawlers equipped with radar, electronic navigation systems, and sonar allowed crews to pursue fish with unparalleled success, and Canadian catches peaked in the late-1970s and early-1980s. Cod stocks were depleted at a faster rate than could be replenished.

1. What are the economic characteristics of fishing that leads to overfishing?

2. What other types of goods are there that have unusual characteristics, that can lead to a market failure?

2. How can overfishing be solved through property rights?