Which one of the following statements about common property resources is false?
A) Social welfare is maximized when private marginal benefits are equal to private
marginal costs.
B) The unregulated outcome does not take into consideration the external costs.
C) The unregulated outcome of a common property resource is inefficient.
D) Government regulation in the form of Pigovian taxes or Individual Transferable
Quotas are potential solutions to the problem of common property resources.
E) Individual profit maximization in the case of common property resources can lead to
the depletion of the resource.

Question

Which one of the following statements about common property resources is false?
A) Social welfare is maximized when private marginal benefits are equal to private
 marginal costs.
B) The unregulated outcome does not take into consideration the external costs.
C) The unregulated outcome of a common property resource is inefficient.
D) Government regulation in the form of Pigovian taxes or Individual Transferable
 Quotas are potential solutions to the problem of common property resources.
E) Individual profit maximization in the case of common property resources can lead to
 the depletion of the resource.

Quizplus · Accepted Answer

This statement is actually about private goods and does not pertain to common property resources. The other statements are true about common property resources.

Which One of the Following Statements About Common Property Resources