Canada's Labrador Peninsula (which includes modern-day Newfoundland and most of modern-day Quebec) was once home to an indigenous group, the Montagnes, who, in contrast to their counterparts in the American Southwest, established property rights over land. This institutional change was a direct result of the increase in the fur trade after European traders arrived.5

a. Before European traders came, the amount of land in the Labrador Peninsula far exceeded the indigenous people's needs. Hunting animals specifically for fur was not yet widely practiced. What can you conclude about the relative scarcity of land or animals? Why?

b. Before the European arrival, land was commonly held. Given your answer in part a, did the tragedy of the commons play out for the indigenous Montagnes? (Remember, air is also commonly held.)

c. Once the European traders came, the demand for fur increased. Do you expect the tragedy of the commons to play out under these circumstances? Why or why not?

d. The Montagnes established property rights over the fur trade, allocating families' hunting territory. This led to rules ranging from when an animal is accidentally killed in a neighbor's territory to laws governing inheritance. Why did the Montagnes create property rights only after the European traders came?