The Market Price of an Individual Transferable Quota Is Equal
The market price of an individual transferable quota is equal to the
A) marginal private benefit.
B) marginal private benefit plus the marginal cost.
C) marginal private benefit minus the marginal cost.
D) marginal social benefit minus the marginal cost.
E) marginal social benefit.
For a common resource, the marginal private cost curve ________ and the marginal social cost curve ________.
A) slopes downward; slopes downward
B) slopes upward; slopes downward
C) slopes upward; slopes upward
D) is vertical; is horizontal
E) slopes downward; slopes upward
For a common resource, the equilibrium with no government intervention is such that ________ equals ________.
A) marginal social cost; marginal social benefit
B) marginal social benefit; marginal external cost
C) marginal private benefit; marginal social cost
D) marginal social benefit; marginal private cost
E) marginal external benefit; marginal external cost
Which of the following is NOT a potential solution to the tragedy of the commons?
A) Granting individual transferable quotas.
B) Setting a production quota.
C) Subsidising use of the resource.
D) Establishing property rights to the resource.
E) None of the above is correct.