Setting Up Rules Limiting Access to the Common Resource and Monitoring

question 76

Multiple Choice

Setting up rules limiting access to the common resource and monitoring and penalizing those who violate them is referred to as ______.

• A) free-riding
• B) regulation
• C) bargaining
• D) privatization

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Definitions:

Externality

A consequence of an economic activity experienced by unrelated third parties, which can be either positive (benefits) or negative (costs).

Gasoline

A highly flammable liquid derived from petroleum, used mainly as fuel in internal combustion engines.

Social Value

The importance or worth that a product, service, or action has to society, including both economic and non-economic factors.

External Benefit

A positive spillover effect of a transaction or activity that benefits a third party not directly involved in the transaction.