This graph shows the marginal cost and marginal benefit associated with roadside litter clean up. Assume that the marginal benefit curve and marginal cost curve each have their usual slope. Suppose the state highway department has picked up 15 bags of litter. Protesters have staged a demonstration demanding that the highway department return to pick up the remaining litter. From an economic efficiency perspective, the protesters have a ________ claim because ________.
A)legitimate; litter generates a negative externality
B)faulty; the additional resources needed to remove more litter could be better used elsewhere
C)faulty; the government is not responsible for taking care of private property
D)legitimate; the government has a responsibility to take action when private market incentives do not yield the socially optimal outcome

Question

This graph shows the marginal cost and marginal benefit associated with roadside litter clean up. Assume that the marginal benefit curve and marginal cost curve each have their usual slope.  Suppose the state highway department has picked up 15 bags of litter. Protesters have staged a demonstration demanding that the highway department return to pick up the remaining litter. From an economic efficiency perspective, the protesters have a ________ claim because ________.
A)legitimate; litter generates a negative externality 
B)faulty; the additional resources needed to remove more litter could be better used elsewhere 
C)faulty; the government is not responsible for taking care of private property 
D)legitimate; the government has a responsibility to take action when private market incentives do not yield the socially optimal outcome

Quizplus · Accepted Answer

The socially optimal level of litter removal is 15 bags per day. The marginal cost of additional litter removal is greater than the marginal benefit.

This Graph Shows the Marginal Cost and Marginal Benefit Associated