This table shows the marginal benefits from widgets obtained by the only three people who value them. Suppose widgets cost $8.50 to produce. If widgets are a public good, how many will be produced by market incentives, and is that the right (efficient) number?
A) Zero will be produced, and this is below the socially optimal amount.
B) One will be produced, and this is the socially optimal amount.
C) One will be produced, and this is below the socially optimal amount.
D) Two will be produced, and this is the socially optimal amount.

Question

This table shows the marginal benefits from widgets obtained by the only three people who value them.  Suppose widgets cost $8.50 to produce. If widgets are a public good, how many will be produced by market incentives, and is that the right (efficient) number?
A) Zero will be produced, and this is below the socially optimal amount. 
B) One will be produced, and this is the socially optimal amount. 
C) One will be produced, and this is below the socially optimal amount. 
D) Two will be produced, and this is the socially optimal amount.

Quizplus · Accepted Answer

The Answer of This table shows the marginal benefits from widgets obtained by the only three people who value them.  Suppose widgets cost $8.50 to produce. If widgets are a public good, how many will be produced by market incentives, and is that the right (efficient) number?
A) Zero will be produced, and this is below the socially optimal amount. 
B) One will be produced, and this is the socially optimal amount. 
C) One will be produced, and this is below the socially optimal amount. 
D) Two will be produced, and this is the socially optimal amount.

This Table Shows the Marginal Benefits from Widgets Obtained by the Only