The Tragedy of the Commons will be evident when a growing number of sheep grazing on the town commons leads to a destruction of the grazing resource. To correct for this problem, the town could
a. allow individual shepherds to choose their own flock sizes.
b. internalize the externality by subsidizing the production of sheep's wool.
c. auction off a limited number of sheep-grazing permits.
d. wait until the market corrects the problem.
c
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Which one of the following statements is false if we increase the discount rate used to allocate a resource across two time periods?
a. The resource will tend to be used up quicker b. The price of the resource will tend to rise faster c. Current consumption of the resource will increase d. The appropriate resource depletion tax will increase e. Future supplies of the resource will decrease
One part of a perfectly competitive trout farm's supply curve is its
A) marginal cost curve below the shutdown point. B) entire marginal cost curve. C) marginal cost curve above the shutdown point. D) average variable cost curve above the shutdown point. E) marginal revenue curve above the demand curve.