Question

QUESTION 6 In the short run, a firm's marginal cost tends to rise as more is produced because of o diminishing marginal returns O the implicit costs of production O diseconomies of scale O rising input costs QUESTION 7 Which of the following is the best example of common property o the car of a student who drives his friends around o the air you breathe bread you bake and share Disney World QUESTION The term "tragedy of the commons" is used to describe overpricing of computer software by Apple G increased rents in areas closer to the beach the difficulty in honestly evaluating public goods O the elimination of social gains due to overuse of open land QUESTION A commons property is O both nonrival and nonexcludable O nonrival, but excludable nonexcludable, but rival either nonrival or nonexcludable, but not both QUESTION 10 When the value people receive on average from a commons property exceeds the marginal cost of use then, o more people will use the common property O social gains are as large as possible O common property creates economic rents o demand for the common property will fall

Answer 1

Question 6)

Answer - C) Diseconomies of scale

As more input is put in place, it gets overcrowded and firm starts to experience diseconomies of scale

Question 7)

Answer - b) the air you breathe

A commonproperty is nonexcudable and out of all the option air you breathe is most appropriate one

Question 8)

Answer - d) elimination of social gains due to over use of open lands

As more and more people use open lands, its gains start to diminish and thus causes the tragedy of commons. This refers to the outcome of the existence and useage of open lands.

Question 9)

Answer - c) nonexculable but rival

A common property is nonexcludable and rival. This means no one can be excuded from using it but people have to compete to use it.

Question 10)

Answer- a) More people will use the common property

As the common property is offering positive gains, more people will flock to take a share of these gains till the time the gains perish