Consider the Stock of Ocean Tuna Which Is Massively Overfished

question 9

Multiple Choice

Consider the stock of ocean tuna which is massively overfished.It is rational for an individual to exploit the resource rather than to conserve the stock because

• A)the marginal private benefit of harvesting tuna is higher than the marginal social benefit of harvesting it.
• B)the marginal private benefit of harvesting tuna is lower than the marginal social benefit of harvesting it.
• C)the marginal social cost of harvesting the fish is lower than the marginal private cost.
• D)the marginal private cost of harvesting the fish is lower than the marginal social cost.

---

Definitions:

Fixed Costs

Expenses that do not change with changes in the volume of production or sales, such as rent or salaries.

Contribution Margin

The difference between the sales revenue of a product and its variable costs, indicating how much contributes to covering fixed costs and generating profit.

Unprofitable Segment

An unprofitable segment is a division or part of a business that consistently generates losses instead of profits.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenue.