Question : 21) The above figure shows the marginal private cost curve, : 1238662

 

21) The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource. A quota to prevent the overuse of the cod sets the catch equal to ________.

A) 0 tons per week

B) 200 tons per week

C) 400 tons per week

D) 300 tons per week

E) 500 tons per week

22) The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture. The market equilibrium with no government intervention is raising ________.

A) 0 goats

B) 40 goats

C) 50 goats

D) 55 goats

E) None of the above answers is correct.

 

23) The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture. The efficient outcome is raising ________.

A) 0 goats

B) 40 goats

C) 50 goats

D) 55 goats

E) None of the above answers is correct.

24) The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture. A quota to prevent the overuse of the common pasture sets the number of goats to be raised equal to ________.

A) 0 goats

B) 40 goats

C) 50 goats

D) 55 goats

E) None of the above answers is correct.

 

25) The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture. If property rights to the pasture are granted to a farmer so that the farmer owns the pasture, the farmer raises ________.

A) 0 goats

B) 40 goats

C) 50 goats

D) 55 goats

E) None of the above answers is correct.

 

26) The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture. Suppose the government assigns individual transferable quotas (ITQ) set to achieve the efficient outcome. The market price of an ITQ is ________ per pound.

A) $4.20

B) $2.00

C) $6.00

D) $4.00

E) $0.00

27) The tragedy of the commons is the absence of incentives to

A) correctly measure the marginal benefit.

B) prevent under use of the common resource.

C) prevent overuse and depletion of the common resource.

D) discover the resource.

E) prevent the free-rider problem.

 

28) For a common resource such as fish, the marginal private benefit ________ the marginal social benefit and the marginal private cost ________ the marginal social cost.

A) equals; is less than

B) is greater than; equals

C) equals; equals

D) is less than; is less than

E) is greater than; is greater than

 

29) For a common resource, the marginal private cost curve ________ and the marginal social cost curve ________.

A) slopes upward; slopes upward

B) slopes upward; slopes downward

C) slopes downward; slopes upward

D) slopes downward; slopes downward

E) is vertical; is horizontal

30) For a common resource, the equilibrium with no government intervention is such that ________ equals ________.

A) marginal private benefit; marginal social cost

B) marginal social benefit; marginal private cost

C) marginal social cost; marginal social benefit

D) marginal external benefit; marginal external cost

E) marginal social benefit; marginal external cost

 

31) For a common resource, efficiency requires that the ________ equals the ________.

A) marginal private benefit; marginal private cost

B) marginal social benefit; marginal private cost

C) marginal social benefit; marginal social cost

D) marginal external benefit marginal external cost

E) marginal social benefit; marginal external cost

 

32) Which of the following is NOT a potential solution to the tragedy of the commons?

A) setting a production quota

B) granting individual transferable quotas

C) subsidizing use of the resource

D) establishing property rights to the resource

E) None of the above is correct because they are all potential solutions to the tragedy of the commons.

33) If the government assigns private property rights to a common resource, then the

A) resource is under-utilized.

B) marginal private cost becomes equal to the marginal social cost.

C) government needs to set a quota to achieve efficiency.

D) resource becomes subject to the free riding problem.

E) resource cannot be utilized.

 

34) The market price of an individual transferable quota is equal to the

A) marginal private benefit.

B) marginal social benefit.

C) marginal private benefit minus the marginal cost.

D) marginal social benefit minus the marginal cost.

E) marginal private benefit plus the marginal cost.