Table 10-3

-Refer to Table 10-3.The social value of the 4ᵗʰ unit of output that is produced is
A) $10.
B) $16.
C) $26.
D) $30.

Question

Table 10-3
 
-Refer to Table 10-3.The social value of the 4ᵗʰ unit of output that is produced is
A) $10. 
B) $16. 
C) $26. 
D) $30.

Quizplus · Accepted Answer

The social value of the 4ᵗʰ unit of output is the marginal social benefit (MSB) of the 4ᵗʰ unit, which is $26. This can be calculated by adding the marginal private benefit (MPB) and the marginal external benefit (MEB) for the 4ᵗʰ unit: MPB = $10 and MEB = $16, thus MSB = $10 + $16 = $26. Therefore, choice (C) is correct.

Table 10-3 -Refer to Table 10-3.The Social Value of the 4ᵗʰ Unit