-Refer to the information above.Total economic surplus could be enhanced by reallocating total spending from

Question

Quizplus · Accepted Answer

Total economic surplus is maximized when the marginal benefit of the last unit of a good consumed equals the marginal cost of producing that unit. In this case, the marginal benefit of public good 2 is less than the marginal cost of producing it, while the marginal benefit of public good 3 is greater than the marginal cost of producing it. Therefore, total economic surplus could be enhanced by reallocating total spending from public good 2 to public good 3.

-Refer to the Information Above