Consider the Stock of Ocean Tuna Which Is Massively Overfished

question 113

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

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Definitions:

Capital Gains Yield

The percentage change in the market price of an asset over a period, excluding dividends.

Shares

Shares represent units of ownership interest in a corporation or financial asset, providing a proportionate claim on its assets and profits.

Geometric Return

The average rate of return per period on an investment, calculated by taking the nth root of the total compounded return, where n is the number of periods.

Investment

The method of apportioning capital with the expectation of financial returns or earnings.