The Figure Given Below Represents an Imperfectly Competitive Resource Market

question 23

Multiple Choice

The figure given below represents an imperfectly competitive resource market. Here common land (and not land used for specific purpose) is under consideration.Figure 18.1

-The people of Andres, a small fishing village in a country, are facing extremely difficult times as their source of livelihood is threatened. Unregulated by the government, the coastline was subject to overfishing for a long time, adversely affecting the stock of fish. The variety of fish has declined and it takes much longer to haul in a decent catch these days. People in Andres are worried that they may have to migrate to other areas or look for alternative sources to earn a living. Which of the following is most similar to this scenario?

• A)Oil producers hoard the extracted oil to increase prices.
• B)Public highways get congested because they are nonexclusive.
• C)Poaching of the Javan rhino for its priced horns in unprotected forest belts of Indonesia has led to its near extinction.
• D)People in Jinbong village now have to pay to be able to fish in the local pond.
• E)A farmer shifts from potato to corn cultivation because the latter offers more profits.

---

Definitions:

Total Surplus

The combined benefit that both consumers and producers receive from a transaction, comprising consumer and producer surplus.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service (indicated by the demand curve) and the total amount that they actually do pay (i.e., the market price).

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, often reflecting gains from trade.

Tariff Revenue

Income generated by a government from imposing tariffs on imported goods.