After mining 9,273 tons of coal, Blue Sky Mining’s managers note that the marginal cost of mining the next ton of coal would be $40 per ton. They also calculate that the user cost of mining that next ton of coal would be $35. If the market price of coal is $72, should Blue Sky mine an additional ton of coal?
c. More information is needed.
4. Good methods for helping to protect natural resources include:
a. Establishing property rights and giving them to local users.
b. Encouraging first-come-first-served property rights.
c. Teaching people to consider user cost.
d. Having the government set up and enforce ITQs
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