-The Above Figure Shows the Marginal Private Cost Curve, Marginal

question 290

Multiple Choice

-The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for cod, a common resource. The market equilibrium with no government intervention is

• A) 0 tons per week.
• B) 400 tons per week.
• C) 300 tons per week.
• D) None of the above answers is correct.

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Definitions:

Credit Default Swap

A financial instrument that enables an investor to transfer or mitigate their credit risk by exchanging it with another investor.

Insurance Contract

A legally binding agreement between an insurer and the insured, where the insurer agrees to compensate for certain losses in exchange for a premium.

Long Hedges

Occur when futures contracts are bought in anticipation of (or to guard against) price increases.

Short Hedges

Occur when futures contracts are sold to guard against price declines.