All categories

2 years ago

Choose the statement about ITQs that is correct.

Business

1 answer:

melomori [17]2 years ago

4 0

Answer:

D. When ITQs are used, no one has an incentive to cheat and exceed the quota.

Explanation:

As ITQs (individual transferable quotas) were initially created by the government to regulate an above all, social affair, which is related to the share in the total allowable catch of fish (species).

Since some of the fishermen have lower and some have higher marginal costs of "producing" fish, they trade ITQ's between themselves, with those who have high marginal costs selling ITQs to those that have low marginal costs. Also, the marginal private cost now becomes determined by the initial marginal private cost of the fish, plus the price of the ITQ. Then, it becomes known as the marginal social cost.

The equilibrium for the ITQ price is the difference between the marginal social benefit and the marginal cost. With the base marginal private cost becoming the marginal social cost, no one has the incentive to exceed the quota, as that would make the marginal cost go higher than the price, and the marginal profit lower. This notion creates the equality between self-interest and social interest.

You might be interested in

How many ink cartridges can you buy with 165 dollars if one cartridge costs 11 dollars

laiz [17]

Answer:

Explanation:

165 divided by 11 is 15. For any number over 10 that you divide by 11, you can ignore the middle number and take the digit in the hundreds place and the digit in the ones place.

7 0

3 years ago

What does the prefix re mean in the word reunited?

sukhopar [10]

Answer:

b. Again

Explanation:

8 0

3 years ago

Read 2 more answers

Given below is a numbered list of cost terms. For each of the definition statements that follow, place the number of the cost te

leva [86]

Answer:

The correct answers are the following:

a - 4 Sunk

b - 5 Opportunity

c - 3 Fixed

d - 2 Variable

e - 6 Incremental

f - 1 Recurring

g - 7 Direct

h - 8 Non-recurring

Explanation:

a) Sunk costs are those that have already occurred in the past and they can not be recovered again so therefore that they are not relevant at the time of taking decisions regarding the futue.

b) Opportunity costs are those that try to measure and show the sacrifice done at the time of making a decision when that sacrifice represents the best second option that the person could have done.

c) Fixed costs are those that are always the same amount and do not change with the activity level of the production of the company.

d) Variable costs are those that do change with the amount of activity level that the company has during the production process.

e) Incremental costs are those that increase the cost level of the production while the output level increases as well, so they are a concept on the margin.

f) Recurring costs are those that tend to repete continously in the production process so the company already know how much the amount of the cost is.

g) Direct costs are those that the company associates with the production process regarding the commodities and all the primary sources that are needed to produce the good and therefore that they impact directly in the production and in the cost of the final product.

h) Non-recurring costs are those that the company are not familiar with due to the fact that they do not repete often and therefore tend to happen once in a while.

4 0

2 years ago

In the classic downward-sloping demand curve, as price increases, the demand for the product or service

vesna_86 [32]

The demand for a product or service would likely decrease as price increases as far as the classic downward-sloping demand curve is concerned. In addition, this specific type of demand curve characterises increase of consumer demand as the price significantly falls.

5 0

3 years ago

Goodwill messages should not be ________.

pashok25 [27]

Goodwill messages should always be without a direct business purpose. If you are on a goodwill mission it should never be done to increase your business but in an effort to support a cause and show compassion.

6 0

3 years ago