Suppose That the Lobster Harvest Is Unregulated and Any Person

Multiple Choice

Suppose that the lobster harvest is unregulated and any person with a lobster boat and some diesel fuel can go offshore,lower a lobster trap,and harvest lobster.As a result,this common resource is overused.Which policy choice might produce the socially optimal lobster harvest?

A) The federal government subsidizes the purchase of lobster boats.
B) The federal government auctions a limited number of licences to harvest lobster.
C) The federal government removes taxes on diesel fuel,which lowers the price of diesel.
D) The U.S.and Canadian governments remove trade barriers,which allows for more trade of products like lobster.