Suppose the Alaskan King Crab Harvest Is Unregulated and Any

question 171

Multiple Choice

Suppose the Alaskan king crab harvest is unregulated and any person with a crab boat and some diesel fuel can go offshore, lower a crab pot, and harvest king crab.As a result, this common resource is overused.Which of the following policy choices might create an outcome in which the king crab harvest is socially optimal?

• A)The state of Alaska subsidizes the purchase of crab boats.
• B)The state of Alaska auctions a limited number of licenses to harvest king crab.
• C)The state of Alaska removes taxes on diesel fuel, which lowers the price of diesel.
• D)The U.S.and Canadian governments remove trade barriers, which allows for more trade of products like king crab.

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