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-(Table: Externalities from Parks) The table Externalities from Parks shows the marginal social benefit and the marginal social cost of preserving various amounts of land in a city for a public park. If 1 acre is dedicated to the park, the park is:
A) too large.
B) the socially optimum size.
C) too small.
D) the efficient size.

Question

Use the following to answer questions: 
-(Table: Externalities from Parks) The table Externalities from Parks shows the marginal social benefit and the marginal social cost of preserving various amounts of land in a city for a public park. If 1 acre is dedicated to the park, the park is:
A) too large. 
B) the socially optimum size. 
C) too small. 
D) the efficient size.

Quizplus · Accepted Answer

If only 1 acre is dedicated to the park, it is too small because the marginal social benefit of additional parkland likely exceeds the marginal social cost, indicating that more land should be preserved to reach the socially optimal size.

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