Use the table below to answer the following questions.
Table 16.3.1

-Refer to Table 16.3.1. The table shows marginal private benefit and the marginal social benefit from the consumption of chemical fertilizer and the marginal social cost of the production of fertilizer. Choose the correct statement.
A)The marginal external benefit is $20 per unit.
B)The marginal external cost is $10 per unit.
C)There are no externalities associated with this market.
D)The marginal external benefit is $10 per unit.
E)There is not enough information provided to determine whether or not there are externalities.

Question

Use the table below to answer the following questions.
Table 16.3.1
 
-Refer to Table 16.3.1. The table shows marginal private benefit and the marginal social benefit from the consumption of chemical fertilizer and the marginal social cost of the production of fertilizer. Choose the correct statement.
A)The marginal external benefit is $20 per unit. 
B)The marginal external cost is $10 per unit. 
C)There are no externalities associated with this market. 
D)The marginal external benefit is $10 per unit. 
E)There is not enough information provided to determine whether or not there are externalities.

Quizplus · Accepted Answer

The marginal external benefit is the difference between the marginal social benefit and the marginal private benefit. In this case, the marginal social benefit is $30 and the marginal private benefit is $20, so the marginal external benefit is $10.

Use the Table Below to Answer the Following Questions