When a Production Quota Is Used to Remedy the Problem

question 20

Multiple Choice

When a production quota is used to remedy the problem of the commons, then

• A) the market equilibrium, but not the efficient outcome, is achieved.
• B) the production quota is set so that use of the resource is where marginal social benefit equals marginal private cost.
• C) all users of the resource have an incentive to cheat on the quota quantity.
• D) the production quota is set so that use of the resource is where marginal private benefit equals marginal private cost.

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Definitions:

X-intercepts

The points at which a graph intersects the x-axis, representing solutions to the equation when y is zero.

Graphing Calculator

An electronic calculator that is capable of plotting graphs, solving simultaneous equations, and performing other tasks with variables.

Completing The Square

A method for converting a quadratic equation into a perfect square trinomial, facilitating its solution.

Complex Numbers

Numbers that comprise a real part and an imaginary part, represented as a + bi, where "i" is the square root of -1.