You Are the Owner of an Area of Open Land

question 129

Multiple Choice

You are the owner of an area of open land.A group of ranchers comes to you and asks if you would be willing to let them graze their cattle on your land.You want to be helpful,so you agree.In order to prevent a tragedy of the commons and protect the health of your land,what should you do?

• A) Hold weekly meetings with the ranchers and maintain communication.
• B) Make it clear that the ranchers are in competition with one another.
• C) Emphasize that the more cattle they graze, the more money they will make.
• D) Allow the "invisible hand" of economics to balance out use of the land.

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Definitions:

Nominal Interest Rate

The stated interest rate of a bond or loan, which does not account for inflation or the compounding of interest.

Bond Yield

The return an investor realizes on a bond, calculated as the annual interest payment divided by the bond's current market price.

Face Value

Face value refers to the nominal or dollar value printed on a security or financial instrument, such as a bond or stock certificate.

Principal Amount

The initial size of a loan or debt on which interest is calculated, or the original investment amount in a financial instrument.