Refer to the information provided in Figure 16.3 below to answer the questions that follow. Figure 16.3
-Refer to Figure 16.3. If Bill is forced to take into consideration the costs he imposes on his wife by playing the saxophone, he will play his saxophone for ________ hours per day.

Question

Refer to the information provided in Figure 16.3 below to answer the questions that follow.  Figure 16.3
-Refer to Figure 16.3. If Bill is forced to take into consideration the costs he imposes on his wife by playing the saxophone, he will play his saxophone for ________ hours per day.

Quizplus · Accepted Answer

At three hours of saxophone playing per day, the private marginal cost (PMC) of playing is equal to the private marginal benefit (PMB) received by Bill. When considering the external costs imposed on his wife, the social marginal cost (SMC) becomes greater than the PMB at four or more hours of playing, making three hours the optimal level of playing to maximize social welfare.

Refer to the Information Provided in Figure 16