The Government Can Intervene to Achieve the Socially Optimal Quantity

question 184

Multiple Choice

The government can intervene to achieve the socially optimal quantity of a common resource by:

• A) assigning property rights.
• B) imposing a tax on usage.
• C) granting a limited number of tradable permits to use the good.
• D) assigning property rights, imposing a tax on usage, and/or granting a limited number of tradable permits to use the good.

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Definitions:

Underwriter

A financial specialist or institution that evaluates and assumes the risk of another party's financial products, often seen in insurance and securities.

Offering Price

The price at which shares of a company are made available for sale to the public during an initial public offering (IPO) or secondary offering.

Market Price

The current financial value at which an asset or service can be acquired or disposed of in the market.

Ownership Position

The stake or interest that a person or entity has in an asset.