Bob lives in a residential neighbourhood that takes pride on well-groomed lawns.Bob's neighbours find that the marginal benefit of someone else's well-groomed lawn is $10.Bob,however,receives the same net benefit from an unkempt lawn as a well-groomed lawn: zero (an unkempt lawn looks bad but costs nothing;a well groomed lawn looks nice but is costly).
-Refer to the information above.For Bob to have an unkempt lawn results in __________ because the total economic surplus is __________.

Question

Bob lives in a residential neighbourhood that takes pride on well-groomed lawns.Bob's neighbours find that the marginal benefit of someone else's well-groomed lawn is $10.Bob,however,receives the same net benefit from an unkempt lawn as a well-groomed lawn: zero (an unkempt lawn looks bad but costs nothing;a well groomed lawn looks nice but is costly). 
-Refer to the information above.For Bob to have an unkempt lawn results in __________ because the total economic surplus is __________.

Quizplus · Accepted Answer

If Bob has an unkempt lawn, then he is not contributing to the total economic surplus of the neighbourhood, which is the sum of the individual marginal benefits. This results in an inefficiency, as the total economic surplus is smaller than it could have been if Bob had a well-groomed lawn. Therefore, the correct answer is D.

Bob Lives in a Residential Neighbourhood That Takes Pride on Well-Groomed