Which of the following leads to the tragedy of the commons?
A) The use of common pool resources above the socially optimal level
B) The low level of satisfaction derived from the use of common pool resources
C) The high rate of taxation on common pool resources
D) The tendency of consumers to use common pool resources without paying for them
A
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Proprietary income refers to
A. revenue flowing to the government from taxes. B. revenue generated by government-run businesses. C. transfer payments from the government to the owners of property resources. D. money borrowed by the government to finance its operations.
Suppose we live in an exchange economy with two goods. Together, we own 300 of good 1 and 300 of good 2. My tastes are captured by the utility function 
and yours are captured by the utility function 
.
a. Calculate the portion of the contract curve that lies in the interior of the Edgeworth Box.
b. Can you make intuitive sense of your answer?
What will be an ideal response?
Legal ceilings on the rate of interest charged to individuals
A) guarantee credit is allocated according to need rather than ability to pay. B) make it easier for people with poor credit ratings to obtain loans. C) reduce the probability corporations will obtain scarce credit by bidding funds away from consumers. D) accomplish all of the above. E) accomplish none of the above.
Which of the following is an advantage of hedging with options instead of forward contracts?
A) Options prices tend to be lower than forward prices. B) If the price moves in the opposite direction to the one hedged against, the hedger can decline to exercise the option and limit the loss to what was paid for the option. C) If the price moves in the direction of the one hedged against, the hedger can decline to exercise the option and limit the loss to what was paid for the option. D) Options allow investors to purchase a forward contract at a later date.