Use the figure below to answer the following questions.

Figure 17.3.2
-Figure 17.3.2 shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture. A quota that results in the common resource being used efficiently is set at
A)0 goats.
B)35 goats.
C)50 goats.
D)55 goats.
E)40 goats.

Question

Use the figure below to answer the following questions.
  
Figure 17.3.2
-Figure 17.3.2 shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture. A quota that results in the common resource being used efficiently is set at
A)0 goats. 
B)35 goats. 
C)50 goats. 
D)55 goats. 
E)40 goats.

Quizplus · Accepted Answer

The efficient use of a common resource occurs where the marginal social cost equals the marginal social benefit. This is typically where the curves intersect, which is at 40 goats in this scenario.

Use the Figure Below to Answer the Following Questions