If the Government Assigns Private Property Rights to a Common

question 83

Multiple Choice

If the government assigns private property rights to a common resource, then the

• A) marginal private cost becomes equal to the marginal social cost.
• B) government needs to set a quota to achieve efficiency.
• C) resource is underutilised.
• D) None of the above answers is correct.

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Definitions:

Opportunity Cost

The cost of an alternative that must be forgone in order to pursue a certain action; the benefits you could have received by taking an alternative action.

Circular-flow Diagram

A visual construct of the financial ecosystem, detailing the exchange of dollars between households and firms via markets.

Legal Services

Professional services provided by lawyers or legal practitioners related to the law, including advice, representation, and the preparation of legal documents.

Revenue Earned

The total income received by a company from its business activities, such as sales of products or services, before any expenses are deducted.