Because government bodies have the power to impose limits on how much of a resource is consumed:
A) it can be efficiency enhancing in markets for common resources.
B) it will always cause deadweight loss.
C) they decide what is the "right" amount for the public to consume.
D) they will often correct a market before testing the effectiveness of social norms to correct the problem.

Question

Quizplus · Accepted Answer

Government bodies can use their power to impose limits on how much of a common resource is consumed, such as setting fishing quotas, which can help to prevent overfishing and improve the efficiency of the market. By limiting consumption, the government can enable the resource to replenish and ensure its availability in the long term. This is an example of how government intervention can lead to an efficient outcome in the market for common resources.

Because Government Bodies Have the Power to Impose Limits on How