Suppose That the Lobster Harvest Is Unregulated and Any Person

question 158

Multiple Choice

Suppose that the lobster harvest is unregulated and any person with a lobster boat and some diesel fuel can go offshore,lower a lobster trap,and harvest lobster.As a result,this common resource is overused.Which policy choice might produce the socially optimal lobster harvest?

• A) The federal government subsidizes the purchase of lobster boats.
• B) The federal government auctions a limited number of licences to harvest lobster.
• C) The federal government removes taxes on diesel fuel,which lowers the price of diesel.
• D) The U.S.and Canadian governments remove trade barriers,which allows for more trade of products like lobster.

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Definitions:

Incremental Sales Revenue

Additional revenue generated from the sale of additional units of a product or service.

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Additional marketing activities that are undertaken to build upon the initial marketing strategy.

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All the actions and tactics a business uses to market and sell its goods or services to its desired audience.

Sales Revenue

The total income generated from the sale of goods or services by a company before any costs or expenses are deducted.