According to Garrett Hardin's view of The Tragedy of the Commons:
A. Externalities will be internalized by the market.
B. Individuals will use the commons up to the point where marginal benefits equal marginal social costs.
C. Individuals will create institutions to prevent the collapse of the commons.
D. Individual will use the commons beyond the socially efficient point.
Answer: D
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When domestic prices rise,
A. people buy fewer imported goods. B. exports rise. C. exports fall. D. business investment rises because interest rates fall.
The fact that monopoly and monopsony exist in resource markets means that:
A. the marginal productivity theory of income distribution is valid. B. resource prices do not always measure contributions to output. C. the resulting income distribution is ethically correct. D. income shares do not exhaust the total output.
Higher stock prices can lead to greater investment spending by firms because:
A. the firm gets 100 percent of the increase in the stock value. B. the market value of a firm is now less than the replacement cost of the firm. C. the cost of internal financing is lower and the firm also gets 100 percent of the increase in the stock value. D. the cost of external financing is lower.
Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher