Multiple Choice
Which of the following creates an incentive to increase the amount of an activity?
A) Constant marginal cost and constant marginal benefit of the activity
B) A decrease in the marginal cost of the activity and an increase in the marginal benefit of the activity
C) An increase in the marginal cost of the activity and a decrease in the marginal benefit of the activity
D) None of the above creates an incentive to increase the amount of an activity.
Correct Answer:
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