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An Oil Field Lies Beneath the Border of Oklahoma and Texas

Question 96

Multiple Choice

An oil field lies beneath the border of Oklahoma and Texas. Both states drill wells every 100 yards, and in two weeks, the field loses all its pressure and ability to produce, leaving 80% of the oil in the ground. This consequence is an example of market failure due to


A) common property resource.
B) public goods.
C) nonrivalry.
D) rivalry between the two revenue-hungry states.

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