Suppose the Alaskan King Crab Harvest Is Unregulated and Any

question 111

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 produce the socially optimal king crab harvest?

• A) Alaska subsidizes the purchase of crab boats.
• B) Alaska auctions a limited number of licenses to harvest king crab.
• C) 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.

---

Definitions:

Weed Control

The process or methods used to prevent or reduce unwanted plant (weed) growth that competes with desired plants in agricultural or horticultural operations.

Private Decision

Choices made by individuals or businesses that primarily affect themselves and are guided by personal preferences or interests.

Total Cost

The complete financial outlay associated with the production or offering of goods and services, inclusive of both fixed and variable components.

Pollution

The introduction of contaminants into the natural environment, causing adverse changes and impacting human health and ecological balance.