The open access equilibrium for a common property resource occurs at the point where
a. Average revenue equals marginal cost
b. Total social benefits are maximized
c. Total private benefits are maximized
d. Marginal revenue equals marginal cost
e. Marginal revenue equals total costs
Ans: a. Average revenue equals marginal cost
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A market in which competition and entry are restricted by the granting of a public franchise, government license, patent, or copyright is called a
A) legal monopoly. B) natural monopoly. C) single-price monopoly. D) price-discriminating monopoly.
If a perfectly competitive firm charges the market price of $14 per unit,
a. its marginal revenue is $14, and its average revenue is less than $14 per unit b. it will sell no output c. its average revenue is $14, and its marginal revenue is less than $14 per unit d. its average revenue is $14, and its marginal revenue is $14 e. its average and marginal revenue are $14 only for the first unit sold
A small amount of international debt can become a heavy burden on a developing economy if
a. interest payments are a large percentage of export revenues b. a trade surplus develops c. the economy grows rapidly d. the country becomes more developed e. total borrowings exceed the $50 million level fixed by the IMF
If labor-intensive textile products could be produced more cheaply in low-wage countries than in the United States, the United States would gain if it
a. levied a tariff on the goods produced by the cheap foreign labor. b. subsidized the domestic textile industry so it could compete in international markets. c. used its resources to produce other items while importing textiles from foreigners. d. levied a tax on the domestic textile products to penalize the industry for inefficiency.