All of the Following Statements Are True Except

question 14

Multiple Choice

All of the following statements are true except

• A)the market price of an ITQ equals the marginal social benefit minus the marginal cost.
• B)when an ITQ system is used in a fishing market,boat owners with a low marginal cost are willing and able to pay more for a quota than are boat owners with a higher marginal cost.
• C)individual differences in marginal cost do not prevent an ITQ system from delivering the efficient outcome.
• D)an ITQ is a production limit that is assigned to an individual who is free to transfer the quota to someone else.
• E)Canada does not use ITQs.

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Definitions:

Actual Interest Rate

The actual rate of interest earned or paid on an investment or loan, considering compounding and other factors, as opposed to the nominal rate.

Non-Interest-Bearing Note

A type of debt instrument that does not pay interest to the holder, instead being issued at a discount to its redemption value.

Discount Rate

The interest rate used to discount future cash flows to their present value; often reflects the risk-free interest rate.

Discount Rate

The discount rate is the interest rate set by central banks charged to commercial banks for loans, affecting the cost of borrowing money.