An individual transferable quota is a production limit that
A)has a price equal to marginal cost.
B)is assigned to every producer in the industry at a predetermined price.
C)is assigned to an individual who must transfer the quota to anyone the government assigns.
D)is assigned to an individual who is free to transfer the quota to someone else.
E)has a price equal to marginal benefit.

Question

Quizplus · Accepted Answer

An individual transferable quota is assigned to an individual who is free to transfer the quota to someone else, hence choice D is correct. Choice A, B, and E are not accurate as an individual transferable quota is not necessarily priced at marginal cost, predetermined, or equal to marginal benefit. Choice C is incorrect as the government does not necessarily assign who an individual must transfer the quota to.

An Individual Transferable Quota Is a Production Limit That