The So-Called Tragedy of Commons Relates to the Idea That

question 80

Multiple Choice

The so-called tragedy of commons relates to the idea that

• A) no one has an incentive to maintain collectively owned property.
• B) collectively owned resources tend to be underused.
• C) collective ownership provides the proper private incentives for efficiency because individuals bear the full costs of their own decisions and enjoy the full benefits.
• D) central planning sets all production and distribution targets.

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Definitions:

Weak Form Efficient

A form of market efficiency that asserts all past prices of a stock are reflected in its current price, hence technical analysis cannot predict future movements.

Insider Information

Confidential information about a company that has not been made public and is used by someone to gain an advantage in the stock market.

Historical Price Patterns

The analysis of past price movements to forecast future price behavior in financial markets.

Market Efficiency

A market characteristic where prices fully reflect all available information, making it impossible to consistently achieve higher returns.