The prime minister of the tiny island nation of Wowza has proposed that the speed limit on its only highway be reduced by 10 miles per hour on Thursdays.Enacting this proposal would be optimal
A)only if the marginal cost of reducing the speed limit falls to zero.
B)as long as the marginal benefit of reducing the speed limit is just equal to or greater than the marginal cost of reducing the speed limit.
C)as long as the marginal cost does not rise.
D)until the marginal benefit of this action is maximized.

Question

Quizplus · Accepted Answer

The proposal should only be enacted if the marginal benefit of reducing the speed limit on Thursdays is equal to or greater than the marginal cost of doing so. This means that the benefits of reducing the speed limit (such as increased safety or reduced fuel consumption) must outweigh the costs (such as reduced travel time or the cost of enforcing the new limit). The proposal does not need to maximize marginal benefit or require zero marginal cost, but it should be implemented as long as marginal benefit exceeds marginal cost.

The Prime Minister of the Tiny Island Nation of Wowza