For a Common Resource, the Equilibrium with No Government Intervention

question 30

Multiple Choice

For a common resource, the equilibrium with no government intervention is such that ________ is less than ________.

• A) marginal private cost; marginal social benefit
• B) marginal social benefit; marginal social cost
• C) marginal private benefit; marginal social benefit
• D) total social benefit; total social cost

---

Definitions:

Loanable Funds

The market model that describes the supply and demand for money that is available for borrowing and lending.

Foreign-Currency Exchange

The process of exchanging one country's currency for another, affecting trade, investments, and economic indicators.

Capital Flight

The large-scale exodus of financial assets and capital from a country due to economic instability, political unrest, or unfavorable policies.

Capital Mobility

The ease with which capital or financial assets can move between countries or markets.