-The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for blue fin tuna, a common resource. A quota to prevent the over-fishing of the tuna sets the catch equal to
A) 300 tonnes per week.
B) 200 tonnes per week.
C) 500 tonnes per week.
D) zero tonnes per week.
E) 400 tonnes per week.

Question

-The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for blue fin tuna, a common resource. A quota to prevent the over-fishing of the tuna sets the catch equal to
A) 300 tonnes per week. 
B) 200 tonnes per week. 
C) 500 tonnes per week. 
D) zero tonnes per week. 
E) 400 tonnes per week.

Quizplus · Accepted Answer

The optimal quota for preventing over-fishing of the tuna is where the marginal social benefit curve intersects the marginal social cost curve, indicating the socially optimal level of consumption. This point ensures that the social costs of fishing (including externalities) are equal to the social benefits, leading to an efficient allocation of resources.

-The Above Figure Shows the Marginal Private Cost Curve, Marginal