1. Which one of the following variables is most likely to increase as production effort is increased?
A. Net revenue
B. Marginal costs
C. Marginal revenue
D. Total costs
E. Average revenue
2. Which one of the following variables is most likely to decline as production effort increases?
A. Marginal cost
B. Total revenue
C. Marginal revenue
D. Total costs
E. Total production
3. The efficient price of a license fee is determined by the difference between ...
A. Marginal revenue and marginal cost
B. Average revenue and marginal cost
C. Total revenue and total cost
D. Average revenue and total cost
E. Total revenue and marginal cost
5. Which one of the following statements is false?
A. The economically optimal level of production is less than the open-access equilibrium level of production
B. The economically optimal level of production occurs at the maximum sustainable yield
C. Charging a license fee for access to a common resource will reduce the production level below the open-access equilibrium
D. The “tragedy of the commons” is more likely to occur as production effort increases
E. A license fee will reduce the incentives for entry into a market