One way to overcome the problem of the commons is to
A) assign property rights so that someone owns the resource.
B) take away property rights so that no one owns the resource.
C) leave the market alone because the market will reach an equilibrium in which the efficient amount of the resource is used.
D) None of the above answers is correct.
A
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If an economist states that not enough of a good is being produced, she usually means that
A) not everyone can afford the good. B) price exceeds marginal cost. C) consumer surplus equals zero. D) at equilibrium, some people who still wish to sell the good cannot find a buyer.
Market failures are less likely to occur whenever
A) private returns are greater than social returns. B) social returns are greater than private returns. C) the free market produces less than what is socially optimal. D) new firms can easily attract start-up capital.