Asked by Ishmail Mgwena on Jun 26, 2024
Verified
(Figure: An Individual's Marginal Benefit from a Public Good) Use Figure: An Individual's Marginal Benefit from a Public Good.Assume that two individuals will share consumption of a public good;each individual has the marginal benefit curve shown in the figure.What is the total social benefit from four units of the public good?
A) $16
B) $60
C) $140
D) $200
Social Benefit
The total advantage to society from an action or policy, including both private benefits and externalities.
Public Good
A product that is non-excludable and non-rivalrous, which means it can be used by many people simultaneously without depleting its availability.
Consumption
The act of using goods and services for personal needs or satisfaction, often analyzed in economics to understand spending patterns and behaviors.
- Utilize the principle where the sum of individual marginal benefits matches the marginal social benefit to ascertain the efficient distribution of public goods.
Verified Answer
At 1 unit, the total social benefit is 10+18=28
At 2 units, the total social benefit is 9+16=25
At 3 units, the total social benefit is 8+14=22
At 4 units, the total social benefit is 7+12=19
Adding these up, we get a total social benefit of 28+25+22+19 = $140. Therefore, the best choice is C.
Learning Objectives
- Utilize the principle where the sum of individual marginal benefits matches the marginal social benefit to ascertain the efficient distribution of public goods.
Related questions
At the Optimal Quantity of a Public Good ...
Suppose That Mick and Cher Are the Only Two Members ...
Esteban, Mariko, and Greta Are the Only Three People in ...
(Scenario: Alexander and Vanessa)Use Scenario: Alexander and Vanessa ...
At the Optimum, the Marginal Social Benefit from Pollution Emissions ...