The Overuse of a Common Resource Relative to Its Economically

question 118

Multiple Choice

The overuse of a common resource relative to its economically efficient use is called

• A)the free-rider problem.
• B)the Tragedy of the Commons.
• C)a public good.
• D)cost-benefit analysis.

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Definitions:

Arbitrage

Practice of buying at a low price at one location and selling at a higher price in another.

Convertible Bond

A type of bond that can be converted by the holder into a specified number of shares of the issuing company's stock at certain times during its life, usually at the discretion of the bondholder.

Acme Corporation

A fictional company often used as a generic placeholder in examples and discussions to represent any typical, large-scale business entity.

Ketone Bodies

Water-soluble molecules produced by the liver from fatty acids during periods of low food intake, carbohydrate restrictive diets, fasting, or prolonged intense exercise.