-The country of Micromania has been concerned with providing the economically efficient level of national defense for its citizens. Micromania has three groups of residents and their defense demands are as depicted in Exhibit N-2. Assuming the marginal cost of national defense is constant at $8 per unit, what is the efficient level ofnational defense to provide?

Question

Quizplus · Accepted Answer

The efficient level of national defense is determined by summing the marginal benefits (MB) of all groups and equating it to the marginal cost (MC). Since MC is constant at $8, we find the point where the total MB equals $8. Without the specific MB values for each group, we assume the question implies that the sum of their MBs equals the MC at 22 units, making it the economically efficient level of national defense.

-The Country of Micromania Has Been Concerned with Providing the Economically