Asked by Marcell Randall on Apr 28, 2024
Verified
If the marginal social benefit received from a good is equal to the marginal social cost of production:
A) an increase in production will improve society's well-being.
B) a decrease in production will improve society's well-being.
C) no change in production can improve society's well-being.
D) the market is producing too much of the good.
Marginal Social Benefit
The extra advantage to the community from creating or using an additional unit of a product or service.
Marginal Social Cost
The total cost society bears for the production of an additional unit of a good or service, including private and external costs.
- Examine the government's function in supplying public goods and overseeing shared resources to enhance social well-being.
Verified Answer
AN
Andrew NorcrossMay 03, 2024
Final Answer :
C
Explanation :
When the marginal social benefit received from a good is equal to the marginal social cost of production, it indicates that the society is achieving allocative efficiency. Any change in production at this point will not improve social welfare and therefore, no change in production can improve society's well-being.
Learning Objectives
- Examine the government's function in supplying public goods and overseeing shared resources to enhance social well-being.
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