Scenario: Ben and Nick Two individuals, Ben and Nick, are the only members of a hypothetical community.They have revealed the marginal private benefits they each receive from a public good whose marginal social benefit is known.In addition, the marginal social cost (MSC) of the public good is known and is constant.
(Scenario: Ben and Nick) Refer to the information and figure in the scenario Ben and Nick.At
Q₂, the marginal social benefit from the last unit of the public good:
A)is equal to the marginal social cost.
B)is equal to the sum of P₄ + P₃.
C)is the optimal level of public good provision.
D)does not benefit Nick very much.

Question

Quizplus · Accepted Answer

The marginal social benefit at Q₂ is the sum of the marginal private benefits received by Ben and Nick, which is represented by P₄ + P₃.

Scenario: Ben and Nick Two Individuals, Ben and Nick, Are