The Efficient Use of a Common Resource Requires That the ________

question 55

Multiple Choice

The efficient use of a common resource requires that the ________ equals the ________.

• A)marginal private benefit;marginal social cost
• B)marginal social benefit;marginal social cost
• C)marginal private benefit;marginal social benefit
• D)marginal social cost;marginal private cost
• E)total benefit;total cost

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Definitions:

Treasury Bond

A long-term government bond with a maturity of more than 10 years used to fund federal expenditures.

Default Risk Premiums

The extra yield that an investor demands to compensate for the risk that the issuer of a bond may default on payment.

Treasury Bond

U.S. government debt instruments featuring fixed interest rates and long-term maturity periods exceeding ten years.

Subprime Mortgages

Loans granted to borrowers with poor credit histories, which carry higher interest rates than standard mortgages to compensate for the higher risk.