Use the figure below to answer the following questions. Figure 16.3.1
-Figure 16.3.1 shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.A quota that results in the common resource being used efficiently is set at
A)0 kilograms a week.
B)4,000 kilograms a week.
C)3,000 kilograms a week.
D)5,000 kilograms a week.
E)1,000 kilograms a week.

Question

Use the figure below to answer the following questions.  Figure 16.3.1
-Figure 16.3.1 shows the marginal private cost curve,marginal social cost curve,and marginal social benefit curve for cod,a common resource.A quota that results in the common resource being used efficiently is set at
A)0 kilograms a week. 
B)4,000 kilograms a week. 
C)3,000 kilograms a week. 
D)5,000 kilograms a week. 
E)1,000 kilograms a week.

Quizplus · Accepted Answer

The quota that results in the common resource being used efficiently is where the marginal social cost curve intersects with the marginal social benefit curve. This occurs at a quantity of 3,000 kilograms a week. At this quantity, the marginal social benefit equals the marginal social cost, and the common resource is being utilized in a way that maximizes societal benefit.

Use the Figure Below to Answer the Following Questions