Despite official government warnings of a severe water shortage, most citizens fail to conserve in the belief that their personal water consumption will have little effect on the community's total water supply. The eventual depletion of the community's water resources provides an example of:

the tragedy of the commons

Explanation:

The tragedy of the commons -

It refers to the economic issue, where every individual is responsible for the consumption of the resources at the cost of other individual, is known as the tragedy of the commons.

The people over consumers certain resources, which then leads to the shortage of that particular resource, affecting the whole economy.

Hence, the example shown in the question, is about the tragedy of the commons.