How Might a Government Intervene in a Market to Prevent

question 114

Multiple Choice

How might a government intervene in a market to prevent the overuse of a common-property resource,such as an ocean fishery?

• A)subsidies to the consumers of fish
• B)reducing the marginal social cost such that marginal social cost equals marginal social benefit,thereby establishing allocative efficiency
• C)subsidies to the firms catching the fish
• D)a system of licences and quotas for fishers
• E)encouraging the use of larger,more efficient trawlers to reduce the marginal private cost to fishers

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Definitions:

Eddy Currents

Circulating currents induced within conductors by a changing magnetic field, often leading to energy loss.

Insulation

Material used to prevent the passage of electricity, heat, or sound from one area or substance to another by providing a barrier or covering.

Embargo Act 1807

A law passed by the U.S. Congress prohibiting American ships from trading in foreign ports, aiming to coerce Britain and France into respecting U.S. neutrality during their wars.

Great Britain

A geopolitical term referring to the island that comprises England, Scotland, and Wales.