If the marginal benefit of one more unit of a public good is $500 for Sam and $800 for Alex, the social benefit of one more unit of a public good is:
A) $500 since the benefit will go to the person who values it least.
B) $800 since the benefit will go to the person who values it most.
C) $1,300 since the benefit of one more unit goes to both individuals.
D) more than $1,300 since the benefits to society exceed the sum of individual benefits.

Question

Quizplus · Accepted Answer

The social benefit of a public good is the sum of the marginal benefits to all individuals, so it is $500 (Sam) + $800 (Alex) = $1,300.

If the Marginal Benefit of One More Unit of a Public